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					                                       PHARE 2001
                             STANDARD SUMMARY PROJECT FICHE


1. Basic Information
     1.1 Desiree Number:            RO 0108.03
     1.2 Title:                     Investments in Economic and Social Cohesion
     1.3 Sector:                    Integrated Regional Measures (RE)
     1.4 Twinning                   N/A
     1.5 Location:                  Romania

2. Objectives

2.1.Overall Objective:

•   To support the Romanian Government to implement an integrated pluri-annual regional
    development policy through investment projects in priority sectors, in order to enhance the
    indigenous economic and social potential of the identified target areas facing severe
    industrial restructuring and demonstrating potential for economic growth, in line with the
    provisions of the National Development Plan (NDP) and in close correlation with the
    institution building support provided for designing national economic and social cohesion
    policies in line with the EU policies and practices.

2.2. Project Purpose:

The achievement of the wider objective will be attained through an integrated set of measures,
with the following specific immediate objectives:

    A. Assistance to small and medium sized enterprises
•   To foster investment for the establishment of new enterprises and the development of existing
    micro and young enterprises in order to increase the overall contribution of Micro, Small and
    Medium Sized Enterprises (SMEs) to the creation of employment and sustainable economic
    growth in the targeted zones;
•   To support investment in existing SMEs in order to create new jobs in the targeted zones
    and develop, diversify and improve the quality and quantity of products and services offered.
•   To support SME access to business support services and training for improving skills in
    preparing and managing projects as well as to improve access to information and
    communication and to enhance the market opportunities for SMEs.

    B. Technical and Vocational Education and Training (TVET)
•   To strengthen and consolidate the achievements of the reform acquired through the Phare
    VET RO 9405 programme for initial TVET; and to support the rationalisation and the
    modernisation of the present TVET system, through a multi-annual investment programme,
    Phase 1 of which is the renovation of selected TVET schools and vocational equipment and
    installation of IT equipment
•   To contribute in reviewing responsibilities, governance and accountability mechanisms in
    the provision of initial TVET in line with the social and economic development as stated in
    the National Development Plan;
•   To contribute in ensuring equal chances for all young people to obtain a good professional
    qualification at a level equal to European standards, by providing TVET which responds
    flexibly to the needs of each individual.

    C. Social Services investment scheme
•   To develop the capacity of the social assistance system in Romania to respond to the needs
    of the citizens by creating appropriate community social services for vulnerable groups in
    areas facing social-economic difficulties including reorganisation and rehabilitation of


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    selected hostels for elderly persons and development of home care services for elderly
    people;
    •To support social inclusion, poverty reduction and effective labour market integration of the
    vulnerable social groups in the 11 target areas undergoing severe industrial restructuring;
    •To strengthen the capacities of regional and local administrations to build effective and
    innovative local partnerships in implementing social service initiatives

    D. Regional/large-scale infrastructure
•   To upgrade regional transport infrastructure for improving access to economic areas and
    strengthening linkage between economic poles and European transport corridors;
•   To develop infrastructures supporting business and tourism development, in order to
    strengthen competitiveness of SMEs through better access to technologies, services, markets
    and information;
•   To rehabilitate degraded sites or to protect environmentally vulnerable sites with economic
    potential (industrial sites, closed enterprises from urban heavily polluted areas, natural sites
    and area with tourist potential), with particular attention to the remediation of the severely
    contamined industrial sites;

    E. Small-scale local infrastructure scheme
•   To improve the local infrastructure, in order to increase the attractiveness of the urban areas
    for inward investment, to rehabilitate the urban environment and increase the quality of life of
    communities suffering from industrial restructuring;
•   To rehabilitate the historical and cultural built heritage, in order to improve the tourism and
    business attractiveness of the urban areas.

    F. Awareness Campaign, Projects Appraisal and Selection, Monitoring and Evaluation,
        and Supervision
•   To promote measures and provide information and advice on project preparation
•   To ensure a transparent, competitive and effective process for project appraisal and selection.
•   To ensure an appropriate and effective implementation for projects financed under this
    programme, through ex-ante evaluation, close monitoring, control and on-going evaluation.
•   To develop and sustain an adequate implementation system for the infrastructure type
    projects, including site supervision and inspection

2.3. Accession Partnership and NPAA priority
This project complies with the following priorities and intermediate objectives agreed in the
Accession Partnership:

•   To develop national policy for economic and social cohesion, prepare for the implementation
    of regional development programmes, improve inter-ministerial co-ordination for structural
    funds
•   To promote competitiveness through market driven enterprise restructuring (including small
    and medium size enterprises)
•   To continue efforts to improve conditions for the creation and development of private
    enterprises with particular attention to micro, small and medium size enterprises (SMEs)
•   To fight against social exclusion through the fostering of the employment opportunities and the
    increase of access to education
•   To prepare the future participation of Romania in the European Employment Strategy.

Within the framework of the National Programme for adoption if the Acquis communautaire the
Phare programme will co-finance within the Romanian regions, projects, which address the
following objectives:

•   To increase private sector development and investment promotion through focussing
    investments in the productive sector.



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•   To provide Assistance to micro, small and medium sized enterprises. Projects will aim to help
    diversify the economy, to develop the private sector and to restructure and modernise
    industries, through supporting productive SMEs.
•   To develop the regional human resources through the VET
•   To improve business-related infrastructure, focusing on infrastructure projects that directly
    benefit productive sector activity and the local business environment;
•   Development of the capacity of the social assistance system to create community social
    services for vulnerable groups as well as support the efforts of reorganizing and
    rehabilitation of the hostels for elderly.
•   A special attention should also be given to the compliance with the principles of sustainable
    and environmentally sound development. One of the short-term priority of the Accession
    Partnership being to complete transposition and enforcement of the Environmental Impact
    Assessment Directive.
•   Transport and environmental infrastructure that will be financed form an indispensable part of
    integrated industrial restructuring or regional development programmes

2.4. Contribution to National Development Plan
The NDP sets out the basis for Phare 2000 intervention initiatives for the period 2000 – 2002. The
preliminary NDP is a living and evolving document and it was updated in May 2000, as the
national strategy on economic and social cohesion developed.

Through its strategy, Romania’s National Development Plan aims at making most efficient use of
available human and financial resources, in order to optimise the activities undertaken in the fields
relevant to regional development.

In line with the demands of the present exercise, Romania’s regional policy, through the National
Strategy for Regional Development adopted in the NDP for the period 2000-2002, embraces the
following development axes:
Axis I: Improvement of the regional economic structure
Axis II: Improvement and development of infrastructure
Axis III: Human resource development
Axis IV: Tourism development
Axis V: Scientific research, technology development and information society
Axis VI. Social and economic development of rural areas

This project will address directly and indirectly the following four development axes:

•         The main objective of supporting regional development within Development Axis 1 is to
develop the most adequate economic structures, in line with the demands of market economy,
which aid the creation of competitive jobs in all regions of the country, and particularly in those
regions, areas or judets affected by structural drawbacks. A concrete way of achieving this
objective is to support productive investments in private sector and SMEs development in
productive sector, which are the two development priorities that materialise this development
axis.
•         Development Axis II: Improvement of Local and Regional Infrastructure - the
economic potential of a region, as well as its attractiveness for locating investment, depend highly
on its infrastructure conditions. Successful regional development initiatives require that the local
infrastructure, as a component of the economic base, is able to support the demands placed upon
it. It is, however, generally recognised that the Romanian social and economic infrastructure is
insufficiently developed to meet the needs and requirements of a growing economy.

•       Development axis III - Human Resource Development, the dramatic fall in economic
activity over the past nine years has had a corresponding effect on the labour market. The
projects to be financed will be mainly directed towards enhancing employment opportunities,
ensuring equal opportunities and social inclusion.



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•       Axis IV: Tourism Development - The projects to be financed aim at substantial
investment for the development and modernising of hard infrastructure, as well as access and
soft investments (training, marketing, etc.) specific to tourism industry, with a view to attaining a
high qualitative level of the services they provide and becoming capable to increase
competitiveness of this field on the international markets.

2.5. Cross Border Impact
Actions and measures implemented under this project could have positive cross border impact
(SME co-operation, transport infrastructure)

3. Description

3.1. Background and justification
As it is shown in the National Development Plan, the economic development disparities within the
Development Regions, between the judets, towns and communes, are much larger than those
between the NUTS II regions. Each Development Region comprises both relatively developed
and underdeveloped areas. The judets where the most difficult problems may be encountered are
those currently affected by the impact of the industrial restructuring process and those
predominantly agricultural.

For these reasons the financial assistance was focused within the areas most seriously affected
by industrial restructuring, identified at a sub-regional level, taking into account the particular
situation of the areas concerned.

The criteria for selecting areas undergoing industrial restructuring with potential for economic
growth are the following (see also Annex 4.1 for the main characteristics of the areas):
• Each area contains clearly identified urban poles with large numbers of unemployed
   workers and serious problems of industrial restructuring - due to the concentration of
   the industrial activities and employment in large enterprises that are not any more
   competitive
• The area has serious environmental problems, which affects the quality of life and, at the
   same time, the area’s image and even the country’s image
• The area contains mono-industrial localities, which have little possibility of diversifying
   their activity, so as to make progresses in halting the economic decline
• The area has transport infrastructure (roads and railways) and connections with Trans-
   European transport networks or is located near them, as a base condition for its further
   economic development
• The localities of the area are traditionally linked through co-operation relationships, either
   as a consequence of the fact that they carry out the same type of activities or
   complementary activities
• The area has European standard communication networks essential for the attraction of
   Romanian or foreign investors, e.g. digital phone networks.
• The area has a wealth of resources that could sustain the national priorities for regional
   development identified in the National Development Plan (e.g. potential for tourism,
   resources for different type of activities in SMEs, infrastructure, young population eager to
   be integrated into the information society etc.)
• The local communities are characterised by dynamism and interest in developing their
   localities and improving the life quality of the people as e.g. demonstrated by good practice
   and "success stories".

According to these criteria, Romania identified 11 "priority zones/target areas" (at sub-regional
level) - where Phare 2001 Program will be focussed. The Romanian Government has already
approved these zones through the Government Decision no. 399/2001. The priority zones have
two important characteristics: suffer the negative impact of industrial restructuring on one hand,
and on the other, they have economic growth potential. This is why they were called "industrial
restructuring areas with economic growth potential" (Annex 4.1).


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In the process of selecting the priority zones, the concentration principle was taken into
consideration: the population of the selected zones does not exceed 30% of the country's
population, in order to benefit from the positive impact of the concentration principle. The budget
allocated for the SMEs, social services and small-scale infrastructure components will be
distributed at regional level proportionally to the number of the inhabitants included in these target
areas, according to the Government Decision no. 399/2001. The implementation of large-scale
infrastructure projects will not be limited to these selected areas, due to their wider – regional and
even national – impact, the location constraints specific to the regional infrastructure and the
longer cycle of project preparation. The allocation of the funds allotted to the VET investment
components will be made according to the identified needs of the school units selected at regional
level, proportionally with the number of VET schools included in the target areas.

For these priority zones will be developed detailed integrated territorial strategies and measures
in the Regional Development Plans to be updated by the RDAs with the support of the twinning
partners identified within the context of Phare 2000 Economic and Social Cohesion Programme.

     A. Assistance to small and medium sized enterprises
The measures targeting SMEs development in the period 2001-2004 will focus on the
intervention to maximise sector’s potential to contribute to the economic re-launching, job
creation, promotion of innovation and technological advance, strengthening competitiveness
and generating a medium class development. In this respect, Government set as priority the
following objectives directly relevant to this project:
•    Enhancing SME sector competitiveness through better information services, financial
     support for innovative projects undertaken by enterprises, including projects with a view to
     introducing international quality systems; economic infrastructure development, including the
     creation of a network of business advisors which will ensure the access of the entrepreneurs
     to information related to the development of the business, as well as facilitating the
     entrepreneurs general access to training programmes and to the information society.
•    SME export promotion through support measures aiming at increasing the Romanian firms
     participation in international fairs and exhibitions, at extending the informational system
     related to international business opportunities, at disseminating among entrepreneurs
     information about regulations in force or applicable in the single European market;
•    Promote investment in SMEs sector through measures aiming facilitating SME access to
     accessible finance and at promoting and developing new modern financial instruments.

The first findings of the assessment of the SME finance projects implemented so far or under
implementation in Romania prepared by the Technical Assistance for the preparation of
SME Credit Lines under Phare 2000 project pointed to the relatively low quality of the
proposed projects and the difficult access to finance of the start-up businesses, due to the
selection criteria. The previous RO 9807 grant scheme was successful in attracting
considerable private investments – the private contribution represented 64% of the total
investments, while the minimum own contribution was set at only 40% - but limited the access to
the finance of the start-ups and micro-enterprises. The interest for grant finance remains very
high between larger and older SMEs, being perceived as a critical factor for development,
adoption of modern technologies and creation of new jobs.

Some of the main recommendations of the assessment were the designing of differentiated
finance schemes for SMEs, with specific selection criteria, and the strengthening of the existing
business consulting centres, in order to improve the quality of their services and support the
implementation of the Phare SMEs investment programmes.

From the assessment made of the Romanian SME financing market in 2001, micro and small
enterprises have no real access to capital, unless it is their own capital. Therefore Phare has a
special niche role to play. It should become known as the premier ‘special sponsor’ source of
grant financing for this sector of SMEs, thereby encouraging the start-up enterprise culture in
Romania with start-up capital. Phare, through its selected financial intermediaries, should



                                                  5
become the obvious first point of contact for talented entrepreneurs trying to launch a solid
business proposition.

Start up grants for micro/small enterprises may not produce substantial increases in
employment whereas special purpose grants to medium sized enterprises, with attached
conditions guaranteeing additional employment, could. These SMEs have already reached a
‘critical’ mass that indicates they have succeeded in passing the initial phase of SME growth,
but need finance to reach the next phase of growth, which in all probability will require additional
employment of staff and investments in equipment. Unlike the micro and small enterprises,
which are less tested, the medium size enterprises have already passed the first survival
hurdles and need the extra help from special purpose grants to reach the next phase of their
development.

Start ups and micro/small enterprises need financial help but this is of little use without training
support. Entrepreneurs often may not focus enough on the market into which they are selling
their ideas, services or products. Therefore training in understanding marketing and market
segmentation becomes extremely important, especially in today’s global marketplace.

This programme component is the continuation of the previous schemes implemented under
Phare 9807 and 0007, which have proven to have been adapted to SMEs needs. It addresses
micro-business formation and expansion, as well as the growth of viable SMEs.

    B. Technical and Vocational Education and Training
The Feasibility Study commissioned by the Ministry of Education and Research through the
Romanian National Observatory for VET and funded by European Training Foundation (Torino)
in year 2000 had as aim to recommend specific actions and measures for the completion of the
reform of TVET in Romania. Recommendations for further investment in TVET have referred to
the following issues:
      1. continuation of reforms initiated by the Phare RO9405 programme
      2. extension of compulsory education
      3. regional and local disparities in the quality of TVET and groups at risk
      4. poor state of infrastructure and equipment

The proposed project represents the continuation of the achievements of the Phare VET
programme RO 9405 and its generalisation policy. At the end of the EU Phare VET programme
RO 9405, in December 1998, the system of vocational education and training has been partially
completed (levels of vocational schools and post-high schools), and left clear recommendations
for generalisation and the completion of the whole system.

The achievements of the TVET reform have been continued by the adoption of legislative
measures that guaranteed the extension of the reform in the system and the generalisation of
the curricula. Based on the ministry of education decisions regarding the generalisation, the
following acts support the legal framework sustainability:
• Law of education no. 84/1995, modified in 1999;
• Government Decision no 855/1998, concerning the establishment of the National Centre for
    Technical and Vocational Education Development (NCTVED) having the explicit task to
    continue the methodological assistance to the generalisation of TVET reform.

The generalisation process started in the school year 1999-2000 with the aim of involving the
whole TVET system in order to avoid inequity of students’ access to the reformed programmes.
This type of non-gradual implementation was positive from the perspective of students access
but had limits related to the quality of training in terms of unequal learning environment and
uneven distribution of the existing resources (qualified staff and equipment).

The reports after the first year of generalisation, as shown by the partial evaluation conducted
by of the NCTVED, state that 42 % of the schools have implemented the TVET curriculum
without difficulty as far as the first school year is concerned. However, they are mentioning the

                                                  6
lack of appropriate didactical equipment as a potential risk for the 2nd and 3rd school years
implementation where the practical training requires appropriate equipment. The lowest results
were reported by 24% of the schools, which claimed that even in the first year the
implementation was troubled by the combined effect of lacking equipment and training of their
staff.

The regional and local disparities on the availability and quality of TVET should also be
addressed. Heavy industrial restructuring does also require restructuring of educational offer in
TVET from traditional industrial trades to economic areas (e.g. agro-tourism) and trades, which
are emerging in the labour market, as well as rural areas.

Groups at risk of social exclusion facing more difficulties in entering the labour market, like
young women and institutionalised young people, should be addressed.

The development of core skills implied by the new technologies and management styles -
required in order to ensure the continuation of reforms initiated by the Phare RO-9405 programme
and answer to the challenges raised by the extension of compulsory education, the lasting
regional and local disparities in the quality of TVET and the specific needs of the groups at risk -
demand investment in TVET school infrastructure. Moreover, the introduction of the modular
training through the TVET reform supported by the previous EU Phare RO 9405 supposes a
modular design of the training places and appropriate facilities for acquiring core skills, such as
self-management and use of IT. At the same time, the process of rehabilitation should convert
under-utilised TVET schools into modern training centres, for both initial and continuing training.

According to the current information on the TVET school infrastructure, there is a need for
rehabilitating, upgrading, and providing appropriate furniture and equipment to the schools.
These measures have in view both respecting the safety standards and general pedagogical
norms of the Ministry of Education and Research, and the standardisation of the working
process and quality assurance required by each employment domain.

C. Social Services investment scheme
The Government of Romania decided to develop social assistance measures in order to cope with
the social negative implications of the economic transition, which would include both benefits and
services and provide some support for all the vulnerable groups now at risk.

There are a large variety of social groups in desperate need of social assistance. The Ministry of
Labour and Social Solidarity (MOLSS) has decided to develop social service for vulnerable
groups who are not covered by the existing services, while the National Authority for the
Protection of Children and Adoption is responsible for services for children and their families
and the Ministry of Health and Family has programmes for children and persons who are
handicapped. In particular, MOLSS intends to support the development of social services for
elderly persons, families and individuals in difficulties and/or living in extreme poverty, young
people entering the workforce for the first time, particularly those who leave placement centres
ill prepared to live independently.

The law concerning the social assistance for elderly persons (17/2000) establishes:
   • The new organisation of the hostels on three sections for old aged persons able to live
       independently, old aged persons with autonomy partially preserved, and old aged
       persons in situation of dependence;
   • The types of social and care services – shelter, meals, permanent supervision, medical
       assistance, social consultancy, programmes for recovering and reintegration, free – time
       spending activities;
   • The financial support is from local council budget and from contributions of the
       beneficiaries; the state can contribute with funds in emergency situations to cover
       overhead expenses, investment and building reconstruction.




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The new legislation promotes and encourage the development of home care services and other
types of institutions for elderly as day care centres, day clubs, respite centres, centres for social
recovery and rehabilitation, etc.

The administration and co-ordination of the delivery of social services for vulnerable
groups at the local level is the responsibility of local authorities. The municipalities can
develop different projects alone or in partnership with non-governmental organisations.
The principle of active partnership with the civil society is set up in Law no. 34/1998
concerning subsidies to social assistance units developed by NGOs. In order to
stimulate the participation of civil society represented by NGOs in performing social
assistance actions, the state gives subsidies to those associations and foundations,
which activate in social assistance. The local councils, from their budget, may also
sustain financially the NGOs. To date, the NGOs have played a major role in providing social
services and the local authorities should be encouraged and equipped to take a more leading
role future.

The new organisation proposed in the draft law of social assistance is designed to ensure that a
wider range of social services will be provided for vulnerable people and with much efficiency.
The MOLSS will be the responsible authority for setting minimum standards for social services,
elaboration national priorities and strategies in the field, establishing monitoring and controlling
methodologies.

The present project intends to develop institutional capacity of the municipalities to provide some
social services directly or to act as agent and catalyst in stimulating the provision of these services
in partnership with other agencies, public, private and non-profit organisations. The efficiency of
social service network depends on the financial resources, professional skills of the staff, working
methods and co-operation with civil society. To create a real social services network it is
necessary to analyse social needs of various groups, to formulate priorities and to provide
individualised services, which are most efficient.

The development of community social services represents an alternative system to
institutionalisation and a condition to respect the rights of each person to choose the place of
living.

D. Regional/large-scale infrastructure
Comparing with the Phare 2000 Programme, a lower priority will be given to the transport
infrastructure, in order to avoid ISPA overlapping and due to the fact that Romania, despite the
economic crisis, has made important progresses in developing its transport infrastructure and in
particular the Trans-European networks. Nevertheless, the shortcomings of the transport
infrastructure, in particular of the road network, lead to losses of economic efficiency and
generate a negative image of the areas as locations for investments. Financial support will be
given to projects aiming to improve and develop the infrastructure and thus contribute to the
overall efficiency of the economic life of the regions and localities and to their attractiveness,
through improved access to the economic (industrial and services) areas and areas with
demonstrated touristical attractiveness.

A sustainable economic development should be achieved also through integrating environment
protection and enhancement into the regional development strategies. Particular attention
should be given to the specific environmental remediation projects for severely contaminated
industrial sites, the wastewater treatment and to minimising air pollution. Highly polluted areas
create a risk for health damage and are a negative factor in the economic development process.
In order to limit the environmental outputs due to the forced industrialisation and to reintroduce
the derelict industrial areas mentioned above in the social and economic circuit, specific projects
would be identified and prepared in co-operation with the privatisation authority APAPS together
with the Ministry of Environment, respecting the principle that Phare will not provide subsidies to



                                                  8
polluting industries. Funds for the preparation of such infrastructure projects can be drawn from
the Phare 2000 project preparation facility.

There is also a need to develop tourism access infrastructure and to improve and rehabilitate
the touristical attractions and visitors' facilities in those areas presenting high tourist potential,
with a view to stabilising and, gradually, broadening the structure of the tourist supply. Many
potentially valuable sites require investment in access infrastructure, appropriate public utilities
and restoration works of the built heritage, preserving in the same time the sensitive natural
environment. The objective will be to support the development of services through the creation
of a favourable environment and positive image of the areas, which will contribute to longer
tourist stays and better use of accommodation capacity, especially off-season, but will not
provide direct support for ‘productive’ tourism investments, like accommodation or catering.

E. Small-scale local infrastructure scheme
In the field of urban infrastructure, chronic under-investment in maintenance and renewal have
caused a rapid deterioration in the quality of municipal services. Local government took over
responsibility for water supply, wastewater treatment and sewerage, but lack the needed
financial resources and tools to access finance.

An important potential for development exists in the cities from the target areas. There is a need
to support towns, with a view to enhancing their capacity to assume the role of drivers for
economic growth of their surroundings, especially since analyses illustrate a phenomenon of
decline of large cities. The support should aim at increasing their attractiveness as location for
investment, which in turn will contribute to their economic recovery. At the same time, the
degradation phenomenon, affecting some least-favoured urban districts, should be halted by
both removing its negative effects and eliminating its spreading to neighbouring areas.

At the same time, the quality of the environment is very poor in most towns, including the
capital-city of the country. In order to change this situation, a thorough knowledge of the specific
profile pollution in each region is extremely important, and could be ensured by the Regional
Development Plans, as well as the National Action Plan of the Ministry of Environment. To fight
and prevent environmental deterioration calls for specific financial means which are not yet
available at regional and local level, and which need national support.

Romania can be an attractive tourist destination and in the past it was a successful destination
in international tourism. However, a number of difficulties must be overcome for this potential to
turn into actual sources of income for the national economy. This will require substantial
investment for development, modernisation and upgrading of the tourism supporting
infrastructure, like access, environment preservation and public utilities infrastructure, in order to
attain the quality level, which is needed for successfully competing on international markets.
Build heritage and other key attraction sites (under public ownership) needs also extensive
rehabilitation in order to raise the touristical areas profiles.

Urban regeneration and development is an essential instrument for increasing tourism
attractiveness, preservation, taking sanitation measures and revitalising towns and communes.
Urban regeneration and development could also contribute, to a great extent, to assembling the
means put forward by various programmes, and also, through the “leverage effect”, boosting
private investments. As a consequence, cities gain attractiveness for new economic activities.
Priority attention will be paid to those infrastructures strengthening regional development
economic structures, creating a favourable environment for industrial, services and tourism
development.

3.2. Linked activities
See annex 4.1.




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3.3. Results
The majority of projects financed by the Phare E&SC 2001 Programme will have to have an
integrated approach by implementing clusters of the five types of projects in target areas within
the development regions.

Investment in regional and local infrastructure shall create the framework within which investment
can be attracted into enterprises, and jobs created in the target areas.

Increased investment in start-up business and SME together with improved training, counselling,
access to information and other support services for SMEs will help to raise their sustainability
and create employment.

.100 VET schools and 22 resource centres will be equipped to facilitate the delivery of initial and
continuing VET equal to European standards, complementing investment undertaken in Phare
VEY RO 9405 and making first phase in a multi-annual programme of new investment in TVET
facilities.

The social services investment scheme will promote locally driven responses for development
and implementation of different kind of social services in 11 target areas with 142 localities
specified by MDP. It will focus on establishment of social service activities (around 100 projects)
corresponding to local defined needs and in partnership between local authorities and NGOs.,
and on improving the conditions in institutions for elderly people. The technical assistance will
support the development of a modulized vocational training system and delivery of the training
to the workforce to be employed in social service projects.

Taken together the components of this integrated intervention should have a positive impact on
socio-economic conditions in each on the target areas, enhancing the labour market integraiton
of young people and promoting social inclusion and equal opportunities.

Quantified indicators of achievement in more details for each sub-component in the respective
Log-frame matrix annexed to the project fiche.

3.4. Activities

A. Assistance to small and medium sized enterprises (SMEs)
The activities foreseen by this project have been designed taking into account the Government
strategy as regards SMEs and the strategies formulated by the Regional Development Boards
and illustrated in the respective Regional Development Plans, as they closely relate to the regions
problems and opportunities and are achievable with reference to the available resources.

Project includes two activities, as follows:
Activity A1 Grant Support Schemes for Business Start-ups, Young Enterprises and
               Micro-Enterprises
ActivityA2     SME Counselling and Advice Scheme

Activity A1. Grant Support Schemes for Business Start-ups, Young Enterprises and
Micro-Enterprises
Grants shall finance investment projects to be implemented by micro enterprises and young
enterprises (established in the two calendar years preceding the date of grant application) in the
11 targeted zones of Romania in order to establish and/or expand productive capacity and
creating new jobs. Grants shall address investment projects in targeted areas by providing seed-
capital to potential entrepreneurs willing to start-up a business, including spin-off activities. Grant
will also be used to assist micro-enterprises and young enterprises that intend to develop their
business, aiming to comply with safety standards and environmental regulations, as well as
investment associated with attaining relevant quality standards, in order to ensure the
preservation of the existing jobs.



                                                  10
Financial support will be provided also for investment necessary in order to obtain quality
certification under international technical and quality standards relevant for their activity (such as
getting ISO 9000 certification etc.) and to promote clean technologies, in accordance with the
EMAS and ISO 14000 standard, including within the non-industrial sector. The achievement of
these international standards at the end of the project is explicitly required, the ultimate aim
being the increase of SME competitiveness. Support will also be made available for investment
related to R&D, innovation, transfer of technology, IT technology

Eligible beneficiaries
Applicants must comply with the following conditions in order to be eligible for a grant:
• . The maximum size of the eligible enterprise will be 50 employees
• Established micro enterprises and young small and medium enterprises must have shown a
    profit or have not recorded operating losses in the fiscal year preceding the date of grant
    application, as certified by their balance sheet; in case the grant applicant has registered
    operating losses and considers that the losses registered in the last balance sheet are
    justified by the establishment of the enterprise in that year, the applicant should
    demonstrates that the loss situation was reverted;
• No previous non-paid overdue liabilities, overdue social charges and tax payment, defaulted
    loans;
• Private companies registered according to the Company Law no. 31/1991 with subsequent
    modifications, and have their headquarters and/or production facilities/operations within
    Romania, in the targeted areas;
• Keeping regular accounting records;
• Not being a subsidiary nor an affiliate of a company having more than 249 employees for
    more than 25% of share capital;
• Have stable and sufficient sources of finance to ensure the continuity of their organisation
    throughout the project and to play a part in financing it;

    All sectors of enterprise activity shall be eligible, with the following exceptions: the primary
    sector (agriculture, energy, extraction), trade, financial and insurance services, casinos, arms
    and ammunitions, tobacco, alcoholic beverages with alcohol content over 15%. The tourism
    services (accommodation, catering, tour operators, etc) are eligible if the provider is actually
    a SME and under the condition that he/she can demonstrate objective capacity for attracting
    visitors from outside
.

Eligible expenditures
Expenditures must be directly linked to achieving the purpose of the grant and appropriately
accounted for. Eligible expenditures could include investment costs to procure equipment,
machinery, and associated investment such as construction related to the investment, intangible
investment, including training and consultancy services to implement the project, transport of
equipment, installation, verification and other works related to equipment purchase, buildings and
rehabilitation of buildings, software, and licenses. Working capital is also an eligible cost for an
amount corresponding to max. 20% of the total investment. Purchase/rent of land, VAT, tax,
retroactive costs, currency exchange losses, as well as non- project related expenditures are not
eligible under Phare funding.

Co-financing
The grant shall finance up to 60% of the project eligible costs. The remaining amount is to be
made available by the beneficiary SME in cash as own contribution.

De minimis rule
The maximum grant from combined Phare and national public funds for each recipient SME is
100,000 cumulated over three consecutive years.

Procedure for awarding grants


                                                 11
The Regional Development Agencies, for awarding grants on a competitive basis shall launch
local open calls for proposals at regional level. A minimum period of 90 days will be given to the
applicants for the preparation of the projects.

The eligible costs, eligibility and selection criteria and procedures will be clearly specified in the
information package made available to potential applicants. The Technical Assistance provided
through the Phare 2000 PPF will support the relevant ministries and the RDAs in the identification
and public awareness of the target area specific needs, constraints, target groups and priorities
relevant for each sub-component evaluation, in order to support the preparation of the Information
packages for the grant schemes designed under the SME component.

In each region, a Regional Selection Committee appointed by the Regional Development Board
will carry out the technical and financial appraisal of grant applications. The Regional Selection
Committee shall be composed by an odd number of voting members and shall comprise one or
more independent professionals agreed by Contracting Authority, as independent voting
members, and members from RDA. MDP will compulsorily participate in the Regional Selection
Committee as observer; Ministry of SMEs and Co-operatives (MoSMEC), EC Delegation and
Ministry of European Integration (MEI) may also participate in the Regional Selection Committee
as observers. Prior notification on the Regional Development Board Meetings dates and agenda
will be requested. The list of the selected projects will be approved by the Regional Development
Board and endorsed by the Delegation of the European Commission in Romania. The evaluation
reports will be submitted to the Ministry of Development and Prognosis and endorsed by the EC
Delegation. Copy of the evaluation reports will be submitted also to the Ministry of SMEs and Co-
operatives.

The assessment of requests for grants will be based on professional analysis of their technical,
economic and financial feasibility and sustainability. The amount of matching funds by the
applicant in excess of the minimum requirements shall demonstrate commitment by the applicant
to the intended investment.

Other evaluation criteria shall be managerial experience and sectoral experience, number of direct
and indirect sustainable jobs created.

Projects should demonstrate a potential for producing a net positive impact on the economy of the
region where activities shall be located, in line with the objectives and priorities of the Regional
Development Plan.

Contracting
MDP will conclude a Regional Framework Agreement with each RDA for the technical
management of the project implemented under this component. Contracting grants shall be under
the responsibility of the Regional Development Agencies as Implementing Authorities and Ministry
of Development and Prognosis, as Implementing Agency.

Procurement following approval of grants will be the responsibility of the beneficiary and will follow
the provisions of the standard grant contract annexed to the Practical Guide for Phare, ISPA and
SAPARD.

The grant agreement signed between MDP, RDA and each beneficiary will specify that the
beneficiary will reimburse the grant or part of it if the grant or part of it is not used in compliance
with the grant agreement terms.



A2 SME Counselling and Advice Scheme
Grants shall finance the counselling and advice related to preparation of funding applications by
micro, small and medium enterprises, and/or training related to the elaboration of feasibility and
market studies, business plans and funding applications, economic and financial projections


                                                  12
based on International Accounting Standards, as well as to the market opportunities and export
promotion measures, aiming at increasing the Romanian firms participation in international fairs
and exhibitions and at extending the informational system related to international business
opportunities. To-be entrepreneurs shall be entitled to access the Counselling and Advice
Scheme.

SMEs and to-be entrepreneurs will receive counselling for obtaining finance for their investment
projects. Support will be provided by qualified advisors, who will counsel the beneficiary SMEs for
adequately developing their investment projects, screening possible sources of financing (financed
by EU, World Bank, EBRD, etc.), adequately preparing applications for finance, successfully
defending their business plan in front of financing institutions (banks etc.), negotiating best financing
terms with the financial institution etc.

As regards enhancing SME access to markets, training and counselling services will be made
available to enhance SMEs access to market and especially export related opportunities. Access
to specialised databases and market information will be also supported, as well as support to take
part in relevant regional, national and international fairs, exhibitions, commercial missions and
company visits (market research, preparation of company-specific marketing plans, counselling
for preparation of collections for trade fairs, etc.). The ultimate aim will be to increase the turnover
and profitability of beneficiary SMEs.

Applicants to A2 scheme shall be as a general rule public or private not for profit organisation (as
Universities, Chamber of commerce, Business centres or information centres).. They will receive
financial                                       assistance                                        for
organisation of training sessions, seminars, information provision, sectoral studies, sign posting to
the most appropriate services providers etc., for groups of SMEs. These organisations have to
prove that they have the necessary human and material resources in order to provide the training
and counselling services required. Grant applications shall be screened on the basis of a rigorous
assessment of the budgeted costs versus the actual market costs for the services to be provided.

The eligible costs, eligibility and selection criteria and procedures will be clearly specified in the
information package made available to potential applicants through a large awareness campaign.

Rate of assistance
The maximum grant from combined Phare and national public funds for each beneficiary is
100,000. The grant could finance up to 80% of the project eligible costs. The remaining amount is
to be made available by the grant beneficiary in cash. In case of profitable organisations the rate
of assistance should be adapted and should be 60% of the eligible expenditure.

The procedures for awarding grants, contracting and procurement will be similar to the
provisions from the A1 activity.

For each component, the Phare 2000 PPF will support the identification of the specific needs
and constraints, the most relevant target groups and their main needs and will assist the
relevant ministries and the RDAs in the identification of the priorities and specific objectives for
each industrial restructuring area. Further TA will be provided through a large awareness
campaign, in order to help the potential grant beneficiaries in the evaluation of needs,
identification of the local target groups, as well as disseminating models for good practice and
Phare project preparation experience.




Budget
The total proposed Phare budget for the SME component in 2001 is 15.0 MEURO.
The indicative allocation by activity of the Phare funds available will be the following:


                                                  13
•     Activity 1            80%
•     Activity 2            20%

                                   Activity                                      Phare Allocation
                                                                                     (Meuro)
SME Component                                                                   15.0
Activity A1    SMEs Grant Support Scheme for Business
           Start-ups, Young Enterprises and Micro 12.0
           Enterprises

Activity A2        Counselling and Advice Scheme for SMEs                       3.0

B. Technical and Vocational Education and Training (TVET)
The planning of the activities for this component will cover a long – term perspective of 2 Phare
programmes. An indicative figure to cover all the investment needs during the 2 years period
has been preliminarily estimated around 64 Meuros (total cost). The total amount for the first
year is 21.00 MEURO of which Phare contribution 16.00 Meuro. The short-term (annual)
perspective is subject of annual revision in accordance with the economic and social dynamics
at the level of the priority areas. The long-term perspective corresponds to the planning
integrated in the NDP.

This project fiche covers the budgetary commitment for Phare 2001 and gives an indicative
figure for the expected budgetary commitment for Phare 2002 based on the immediate
investment priorities identified together with the Ministry of Development and Prognosis for the
11 selected areas. However, the funding of the following phases may be subject of annual
decision and would be conditioned upon the achievement of the general benchmarks:
•   integrated benefits of the programme into the policy and operations of MoER furthered by a
    strategic review at the beginning of 2002;
•   rationalised TVE school network agreed with the social partners and public authorities1;
•   effective social partnership institutions supporting TVET implemented at local, county,
    regional and national level by the end of 2001;
•   formal support of the County Councils, Local Councils and County School Inspectorates
    related to the works and equipment investment in schools (allocation of funds for
    rehabilitation of school areas and maintenance of buildings from the local authorities;
    effective support for the identification of the didactical equipment, technical specifications
    preparation and monitoring of the full use of equipment from the School Inspectorates).

Two types of contracts will be concluded under this component: for schools buildings rehabilitation
(works) and for procurement of the office and IT equipment. The activities undertaken in this
investment project will be closely correlated with the Institution Building activities implemented at
national, regional and local/school level under the Phare 2001 Programme, intending to support
the rationalisation and the modernisation of the present TVET system and to support schools to
deliver modern Technical and Vocational Education and Training.

B1. Works:
The type of needed works refer to some categories, as follows:
   • Providing structural repairs and consolidation to the schools presenting serious damages
       of the walls, roofs, etc
   • Providing essential utilities, such as toilets/sanitation, fire escapes, water supply,
       heating, ventilation, illumination, electricity
   • Upgrading training classrooms for installing the IT equipment
   • Rehabilitation of the vocational workshops and necessary upgrading for installing the
       specialised equipment.



1
    Recommendations should be set by September 2001, as resulting from the Feasibility Study

                                                         14
Technical specifications for the school rehabilitation will be prepared prior to the beginning of
the first year of the project, during 2001. The activities for preparing Technical Specifications will
be carried out by short-term technical assistance under PPF Phare 2000, together with the
MoER to facilitate a rapid start of the programme. Tender dossiers will be launched for both the
works and for the site supervision and inspection for school buildings rehabilitation (contract
included in the F4 activity).

An average amount of 100,000 EURO/ school unit represents a provisional estimation of the costs
that should be allocated for the works. Local authorities could provide local co-financing for
additional works for preparation, improvement and rehabilitation of school areas.

During the two annual phases of the programme, the selected schools will benefit of gradual
rehabilitation, starting with basic repairs and finalising with the upgrading of vocational
workshops, as follows:
2001: 111 units located in the target areas (including 100 TVET schools and 11 resource
centres)
•  Providing structural repairs and consolidation to the schools presenting serious damages of
   the walls, roofs, etc;
   • Upgrading and rehabilitation of essential utilities, such as toilets/sanitation, fire escapes,
        water supply, heating, ventilation, illumination, electricity;
   • Upgrading training classrooms for installing the IT equipment;

2002: 111 units located in the target areas (including 100 TVET schools and 11 resource
centres)
• Rehabilitation of the vocational workshops and necessary upgrading for installing the
   specialised equipment

B2. Supply of Equipment
The Investment component for equipment contracting will start in the year 2001, with the aim of
delivering the information technology (computer networks) and office equipment. The
preparation of technical specification for IT and office equipment, as well as the preparation of
technical specifications for the specialised equipment and of the related tender documents for
this phase will be supported by technical assistance contracted under Phare 2000 Project
Preparation Facility of MoER. Specialised workshop equipment for the TVET schools will be
contracted and delivered during Phare 2002 programme.

The project will address 122 TVET institutions, as follows:
   • 100 TVET schools and 11 resource centres in the 11 priority areas (“in-area resource
       centres), which are considered sustainable for the TVET system and included also in the
       works contract.
   • an additional number of 11 resource centres outside the 11 areas will assist the
       implementation of the IB activities, and assure the provision of trainer training at the
       regional level. Their primary goal is to assist training of teachers/trainers for occupations
       not covered by the in-area 11 resource centres.

Taking into consideration the average costs 37.550 ECU of the similar equipment provided
during the previous programme Phare VET RO 9405, the amount of average 45.000 EURO per
school represent the estimation of IT and office equipment costs. The lot allocated to each
beneficiary unit will include at least 10 modern computers, 4 printers and 1 server, 1 scanner, 1
overhead projector, 1 LCD panel, 1 TV set, 1 video player, 1 video camera, 1 copy machine, 1
fax machine, 1 flipchart. Internet access and e-mail will be also provided. The resource centres
will receive supplementary 1 multimedia projector and 1 laptop.

Schools in rural areas will be further assisted in order to reach equal chances in communication
and information access. The 11 centres located in the target areas will be additionally equipped
with IT and office equipment in order to offer information and documentation, and trainers and
teachers training facilities. The 11 centres located outside the target areas - but supporting the

                                                 15
TVET reform of the units located in the 11 areas - will be additionally equipped with office
equipment, in order to offer enhanced facilities for trainers and teachers training for relevant
occupations for which they represent single providers

Eligible beneficiaries:
The local level is represented by the TVET schools, as main beneficiaries together with their
social partners at local, county and regional levels, and assures the operational activities. The
estimated total number of the involved schools located in the target areas is 100, plus a number
of 11 acting as resource centres. It will be assisted also an additional number of 11 resource
centres located outside the target areas, but supporting the TVET reform of the units located in
the 11 areas, that will be distributed according to the specific needs of the selected target areas.

Schools will be actively involved in the didactical equipment identification based on the provided
qualifications, supported by the County School Inspectorates, in time and qualitative preparation
of premises in view of the equipment installation, and will confirm the delivery of the fully
operational equipment. They will also help in identifying the necessary works for the
rehabilitation of buildings and installation of equipment, together with the local authorities
responsible for the school buildings administration.

Selection procedure:
The Investment contracts will be preceded by the selection of school units in each of the priority
area. The task will be carried out by the Regional Consortia that shall operate at the area level
under the co-ordination of Regional Development Boards.

Regional level
The project will create Regional Consortia of currently acting institutions formed by Regional
Development Agencies, Local (County) Committees for Social Partnership Development in VET,
County Councils, as well as the County School Inspectorates. The leading institutions will be
represented by the relevant Regional Development Agency. The Regional Consortia will form a
consultative structure of the project and their main tasks will be:
       • selection of VET schools and resource centres which will take part in the project;
       • identification of training relevant for regional development.
       • selection of qualifications that will be developed within the project;
       • identification of occupational equipment to enable training relevant for regional
            development.

The regional level represents a concerted action of different key actors in order to maintain the
coherence of VET within the regional development policy.

The Regional Consortia will proceed to a thorough assessment of the TVET application files. The
result of the analysis process will end with a scored regional list, which will be submitted to the
Regional Development Board. For the proposed schools a recommendation will be attached.

Selection criteria for schools:
⇒ the individual needs of the school population: school emphasising particular needs of
   students such as risk of marginalisation, deviant behaviours, etc. (higher score will be given
   to schools which demonstrate capacity to undertake special programmes to respond to
   individual needs of students)
⇒ educational offer: schools whose educational offer is linked to the national development
  priorities for both regional/local and sectoral development, e.g. preparing qualified people
  and assuring quality in fields related to regional/local labour market needs (as an example
  services and tourism, including agro-tourism activities). Higher scores will be given to
  industrial school clusters proving potential for converting the educational offer to priority
  economic growing domains.
⇒ managerial offer and social partnership: schools demonstrating by their school development
  plans that they have a clear understanding of their mission and active mechanism for
  developing social partnership in a sustainable way supported by developed or ongoing

                                                16
  projects, agreements concluded with social partners associations (higher scores will be
  awarded for stable partnerships and for the capacity of attracting extra budgetary funds)
⇒ allocation of resources (human and material): schools with appropriate premises for
  training, as well as qualified teachers and instructors (higher scores will be given to schools
  showing the appropriate allocation of resources in the required field of training)
⇒ support of the public authorities for the investment in TVET: proving evidence for good
  partnership with local public authorities (higher score will be given to schools demonstrating
  support of the authorities in the process of investing in TVET, including additional
  investments financed from local sources)

The 11 centres inside the target areas will elaborate application files and follow the same
procedure for selection as the 100 schools.

The selection of 11 resource centres inside the 11 areas will be based on the following
criteria:
•    experience in curriculum development and trainer training during Phare VET RO 9405;
•    experience in continuing training;
•    experience in applying for projects linked to EC or non-governmental sources in the field of
     human resource development;
•    location in areas under industrial restructuring;
•    evidence of updated infrastructure for the fields in which they offer the continuing training
•    active partnership with the local community and the economic agents.

Two resource centres will be selected out of the 11 inside the areas to train teaching staff in the
teaching of students with special needs with a view of their gradual integration into normal
school environment. The selection will be done at the level of the MoER. The above mentioned
centres have to be located in such a way, that one will serve the Northern areas and the other
the Southern ones. Selection criteria will be as follows:
   • good results in vocational education;
   • good practices in child care process;
   • effective relations with public authorities and specialised services in child protection;
   • effective relations with a University department for teacher training, Teacher’s Houses,
      and social partners.

The 11 centres outside the 11 areas are subject of selection at the level of the MoER, as they
should assist the coherent implementing of reform at the national level.

Co-financing
The local authorities as well as local economic agents could contribute to the co-funding of
additional investments (not included in the main works and supply contracts) for the selected
school units in each county within defined area.

C. Social services scheme
C1. Grant scheme for social services projects
The grant scheme sub-component should be aimed at preventing the social exclusion of
vulnerable members of communities and will include the following types of activities:

       •   development and improvement of local community implemented projects, in the
           industrial restructuring areas, able to provide social services for vulnerable groups:
           social canteens, night shelters for homeless, temporary shelters for young persons
           leaving institutions, home care services, day care centres, day clubs and respite
           centres, centres for social recovery and rehabilitation, home services, protected
           workshops, temporary housing, day centres for people in need, centres for
           counseling, home-aid support, hot-line advice etc., including rehabilitation of the
           selected institutions and the endowment of the elderly care homes with specific
           equipment (medical, social, maintenance and rehabilitation therapy) for this kind of
           persons.

                                                17
        •   Training for the unemployed in construction and building as part of a project for
            rehabilitation of selected institutions

Grant support shall be up to Euro 200.000, Phare contribution, for each individual project. The
beneficiary is to match grant funds with own contribution amounting 10% of the total costs of the
project, provided in cash. The proposed budget is 11 Meuro for social services grant scheme.

The social services for vulnerable groups should be clearly targeted to elderly people in
dependence situations, homeless, young persons who have drop-out school or left placement
centres, unemployed’s families, single women with children in situation of extreme lack of living
resources and other persons in difficult situations and/or living in severe poverty situations. This
component of the project will contribute to a reduction in the overall level of unemployment,
through the creation of permanent and temporary employment in the 11 target regions, creating
opportunities for new activities and new jobs in the social sector.

The Phare 2000 PPF will support the identification of the needs, constraints and potential for
development, specific to the social services development sector, the most relevant target
groups and their main needs and will assist the RDAs in the identification of the priorities and
specific objectives for each industrial restructuring area. The PPF should also provide a
diagnosis of the existing development level of the social services providers and NGO sector.
Further TA will be provided through a large awareness campaign, in order to help the potential
grant beneficiaries in the evaluation of needs, identification of the local target groups, as well as
disseminating models for good practice and Phare projects preparation experience.

Eligible beneficiaries
Local and county councils will prepare their own projects, preferably in co-operation with local
NGOs, other key actors in local community and other public authorities, based on a partnership
agreement, establishing roles, responsibilities and inputs for each partner. The level of
involvement of partners will be a selection criterion, and ‘twinning’ arrangements between
experienced partners and local authorities from areas where the social services NGOs are less
developed will be strongly encouraged. The plans should in principle contain clearly defined
objectives for selected improvements in social services to locally perceived priority needs and
building on existing facilities and resources.

Eligible expenditures
Expenditures must be directly linked to achieving the purpose of the project and appropriately
accounted for. Eligible expenditures could include:
• investment costs: rehabilitation, improvement and fitting out of buildings, equipment (including
    related transport expenditures), furniture, means of transportation, etc.;
• Staff costs for the duration of the projects;
• Running costs: consumables, communication, fuel, foodstuff, medicines, insurance, publicity,
    etc;
• training of unemployed in construction and building, so they are ready to be employed in the
    project implementation: honoraria for trainers, rent, meals, local transport, etc,

Selection criteria
The assessment of requests for grants will be based on professional analysis of their relevance –
identification of specific regional/area/local needs and constraints, identification of the target
groups and their needs, innovative approach, promotion of equal opportunities and effectiveness
in fighting social exclusion, etc. - technical feasibility, sustainability after the end of Phare financing
and cost-effectiveness of proposal. The amount of matching funds by the applicant shall be taken
into account as far as it demonstrates commitment by the applicant to the proposed project, as
well as the outlined strategy for engaging alternative sources of finance.

Other evaluation criteria shall be: managerial experience and sectoral experience, synergy and
complementarity of the project with state/other donors support in the area, the replicability of the
project.

                                                    18
Procedure for awarding grants
The Regional Development Agencies, for awarding grants on a competitive basis shall launch
open calls for proposals at regional level. The projects that have not been selected can be
improved and submitted for the next selection. The eligible costs, eligibility and selection criteria
and procedures will be clearly specified in the information package made available to potential
applicants. In each region, a Regional Selection Committee appointed by the Regional
Development Board will carry out the technical and financial appraisal of grant applications. The
Regional Selection Committee shall comprise one or more experts agreed by EC Delegation,
including independent voting membersand from RDA. Ministry of Development and Prognosis
and representatives of MoISS will compulsory participate in the Regional Selection Committee as
observer; EC Delegation and MEI may also participate in the Regional Selection Committee as
observers. The Regional Development Board will approve the list of the selected projects. The
evaluation reports will be submitted to MDP and endorsed by the Delegation of the European
Commission.

Contracting
MDP will conclude a Regional Framework Agreement with each RDA for the technical
administration of the project implemented under this component. Contracting grants shall be
under the responsibility of the Regional Development Agencies and of the Ministry of
Development and Prognosis.

The grant agreement signed between MDP, RDA and each beneficiary will specify that the
beneficiary will reimburse the grant or part of it if the grant or part of it is not used in compliance
with the grant agreement terms. In addition, the grant contract or sub-contracts will specify the
conditions of infrastructure maintenance related to the granted project.

Procurement of services, supplies, and works, following approval of grants will be the
responsibility of the beneficiary and will follow the grant contract relevant provisions.

C2. Training in skills for social services
Specific to this component is that a technical assistance will support the implementation of the
selected projects. The technical assistance (TA) sub-component should lead to the creation of
the counter-part capacity to deliver high-standard training in this field. A condition for ensuring
good quality social services delivered through the selected projects is a well-prepared workforce
which will take up the challenge to work in this field further. A well defined and targeted,
modularized vocational training system is the basis for preparing people to work in social
services. The TA is proposed to work closely together with the MoLSS network of training
institutions, to ensure transfer of know-how and to develop curricula corresponding to the
Romanian needs for this kind of training.

The TA team will be responsible for following activities all targeted to vocational training in the
field of social services:

       1. carrying out a training needs analysis on social services, including the training
          offer/institutions in the field
       2. preparation and delivery of targeted, modulized vocational training packages to
          comply with the needs of the selected local projects in social services
       3. delivery of trainers' training in tools of modern adult training especially planning and
          presentation skills, team-work in relation to train unemployed to work in social
          services.
       4. development of curricula

MEuro 1 is the proposed budget for this sub-component.

Contracting Authority is Ministry of Development and Prognosis, and Implementing Authority id
Ministry of Labour and Social Solidarity.


                                                  19
Beneficiaries of this type of training:
• Staff from identified training institutions in social field, belonging to Ministry of labour and
   Social Solidarity network;
• Staff from social service providers, selected to be financed under the C1 grant scheme;
• Unemployed to be hired in social services financed under the C1 grant scheme.

D. Regional large-scale infrastructure

General conditions
Investment in regional and local infrastructure is intended to create the framework for domestic
and/or foreign investment to be attracted into enterprises, and sustainable jobs created, in the
target regions. Therefore, the projects financed under this programme component will have a
complex approach targeting different needs and various target groups with a wide regional
impact, in line with economic and social-cohesion aims.

Type of projects
General eligibility criteria will apply to all infrastructure projects:
• Direct beneficiaries of Phare and national support must be public authorities (national or local)
   or state institutions (e.g. state universities) which will be normally the legal owner of the
   infrastructure to be realised
• Direct support to individual commercial enterprises or group of commercial enterprises does
   not fall into the scope of this sub-programme
• Access to the infrastructure must be guaranteed for all potential users on equal terms; if
   differentiated tariffs are foreseen, detailed justification should be provided on a case-by-case
   basis;
• Granted infrastructure will remain the ownership of the public sector during at least 5 years. If
   privatisation occurs before, the conditions of privatisation will be subject to formal approval
   from the EC Delegation.
• Public co-financing is requested from the state budget for each project.

As a general rule, each project will have a minimum 2 Meuros total budget and the maximum
Phare support will be 5 Meuros per project. Selection of projects to be financed under this
component takes account of other potential or actual projects financed from different sources, in
order to avoid overlapping with ISPA and SAPARD financing. A substantial co-financing from
different national and international sources and solid agreement on this issue will be necessary.
The RDAs will have an important role to play in attracting additional financing sources.

Phare 2001 will finance regional infrastructure projects on the basis of the ‘pipe-line’ of projects
identified for Phare 2000 Programme, i.e. sustainable projects with regional proved impact that
were not mature enough for financing in Phare 2000 Programme, as well as similar projects
identified in the present standard project fiche.

PHARE will only co-finance works when responding to EU standards. Environmental Impact
Assessment will be required following the EU Directive n° 85/337/EEC and technical design will
be in compliance with EU standards.

Transport infrastructure:
• Improvement or creation of access infrastructure to industrial zones, factories, warehouses
   and other economic areas (e.g. services areas) from the main transport networks;
• Improving transport infrastructure, in order to support a modern, efficient transport and to
   facilitate access to areas with high tourism potential;
• Developing the roads, which facilitate access to areas being restructured within the context of
   regional development priorities.




                                                20
The project could support transport infrastructure only if it demonstrates a clear, direct link to
economic development (e.g. ring roads, access roads to industrial/technology zones, or
roads/rail/river transport contributing to tourism development). The concrete economic impact of
the investment foreseen will have to be established in line with the priorities selected in the
Regional Development Plans. As far as possible, the expected impact of the investment will be
quantified (number of enterprises concerned, regional importance of the traffic, temporary and/or
permanent jobs created and/or maintained).

The projects should meet regional needs possibly with impact at national level and will be
developed as large local/regional and/or regional/national partnerships.

Business and tourism infrastructure
This type of projects will respond to regional needs of job creation and economic development,
and shall have to comply with sustainable development requirements. Selected projects shall aim
to develop infrastructure for business and tourism activity and to rehabilitate existing economic
areas, including the derelict industrial sites, with a view of strengthening the competitiveness of
forecasted future beneficiaries, SMEs such as, and of preparing the conditions for further
development and diversification of the services which will contribute to longer holidays and
better use of the accommodation capacity, especially off season.
• Industrial and commercial zones and business incubators
• Development of business sites and premises including the extension or rehabilitation of
    existing premises for facilitating restructuring process
• Regeneration of depressed areas, including development of environmental assets
• Development, improvement and up grading of the public utilities in areas with demonstrated
    tourism attractiveness, and restoration works of the built heritage, preserving in the same
    time the sensitive natural environment.
No direct support for ‘productive’ (private, public or mixed) tourism investments, like
accommodation or catering, will be provided under this component.

Environmental rehabilitation and protection of industrial sites and areas with economic
and tourist potential
This type of projects will respond regional needs and will prepare the conditions for a further
development of the region. The following type of projects could be eligible:
• Rehabilitation of derelict industrial sites and closed enterprises from urban areas in order to
    improve the social-economic climate and allow the development of new sites and premises
    for industrial and technological parks, including remedial projects for severely contamined
    industrial sites
• Rehabilitation and/or protection of environmentally vulnerable sites with economic potential
    (natural sites and other areas with tourism potential).

Priority will be given to projects, which are part of an integrated plan, including economic
development, job creation, environmental rehabilitation and environmental protection.
Development of basic infrastructure (solid waste and wastewater treatment) could only be eligible
when these investments are proved to be part of an ecological rehabilitation plan, which directly
facilitates business and tourism development.

All projects will have a primary appraisal at regional level depending on the regional priorities.

Identification, appraisal, selection and implementation of the infrastructure projects:
A list of potential eligible projects is in the process of being finalised by a working group composed
of representatives from: the RDAs; the Ministry of Development and Prognosis; line ministries
responsible for transport, environment, industry and public works policy; National Administration
for Roads; Ministry of European Integration; EC Delegation in Romania.

The working group established an indicative list of potentially eligible projects. The main selection
criteria have been: coherence with objectives and priorities of the National Development Plan and


                                                  21
the Regional Plans, expected regional economic and social impact - including job creation,
sustainability, maturity, demonstrated commitment of the beneficiaries to the project.

Feasibility studies or updating of existing feasibility studies of the selected projects will be finalised
with the support of 2001 Phare programme – the PPF component. The complete feasibility
studies including Environment Impact Assessment will be completed at the beginning of 2002.

The eligibility criteria for projects financed under the component are:
• Project size
• Non eligibility for ISPA financing (overlapping should be avoided);
• the project should match the objectives and priorities of the Regional Development Strategy
   for the area where it develops and should respond to the development needs based on
   market economy principles;
• the project should demonstrate that it would have a net positive quantified impact on the
   economy of the region where it is located, including jobs creation.
• the project ensures sustainability and maintenance once the external financing ends;
• the availability of co-financing will be ensured;
• environmental impact assessment, following the EC Directive N° 85/337/EEC requirements,
   must have been completed.

According to EU practice the following projects will not be accepted:
• projects which could overlap activities already financed or in process of being financed from
   Community funds.
• Projects where the applicant was declared to be in serious breach of contract for failure to
   comply with obligations in connection with another contract with the same contracting
   authority or another contract financed with Community funds.

The projects can be developed in local, regional or national partnership. In this case the
responsibilities of all members of the partnership will be specified in all phases of the projects, and
all the partner organisations should comply with the eligibility criteria. In all cases the problem of
property will be clarified and the owners of the results of the projects will be very clearly defined.

When the feasibility studies and other relevant structural and economic studies will be completed
the Regional Development Board will approve the final selection of the projects to be implemented
under Phare 2001 Programme. The final decision will be taken by the NBRD, subject to
endorsement by the EC Delegation, taking account of the results of the feasibility studies, the
conformity of the project with the priorities and criteria established in this project fiche, the
availability of co-financing for the project and the prospect for implementation of linked activities.

As a different approach comparing with Regional Policy and Cohesion RO9807.01, the financing
assistance allocated for the development regions should shape the principle of fair competition
and maturity of the projects and not the principle of equal allocation.

E. Small-scale local infrastructure scheme
This sub-component supporting the local level infrastructure projects is to allow localities from
the target areas to take advantage of the fall-outs of larger infrastructure development initiatives
at regional and national level.

It will focus on supporting a range of actions to develop the urban areas as competitive
locations for business development and for attracting inward investment, as well as to improve
the touristic attractiveness of the cities from the industrial restructuring zones and the adjacent
areas.

Eligible activities:
The small-scale infrastructure scheme may support projects concerning:
E1. the rehabilitation and improvement of hospitals, local transport infrastructure (modernisation,
rehabilitation, consolidation works, etc.) and environmental infrastructure (water supply, sewerage

                                                   22
network and waste-water treatment, urban solid waste disposal) etc. in order to improve the urban
infrastructure;
E2. investment projects providing capital to improve the quality of tourism offer through the
development, improvement and up-grading of the acces, environment and public utilities
infrastructure in areas with demonstrated tourism attractiveness, and restoration works of the
built heritage, in order to increase the diversification of tourist products necessary to satisfy the
request of special profile markets.

No direct support for ‘productive’ (private, public or mixed) tourism investments, like
accommodation or catering, will be provided under this component.

The E2 sub-component may finance the restoration/improvement and preservation of historical,
cultural and religious buildings and/or other famous public sites, which may become key
attractions for tourists in a given area. Other public infrastructure can be financed under this
measure, such as museums and other public exhibitions, youth hostels, tourism tours signs, etc.
aiming to:
            preserve the country’s cultural and historical heritage and landscape;
            rehabilitate museums and galleries;
            develop soft infrastructure, such as sign-posting and panel guides;
            create/develop access infrastructure to/from tourist areas, especially mountain
            areas.

Direct support to individual commercial enterprises or group of commercial enterprises does not
fall into the scope of this sub-programme.

The indicative allocation by activity of the Phare funds available will be the following:
• Activity E1           50%
• Activity E2           50%

Eligible beneficiaries
Direct beneficiaries of Phare and national support must be public authorities (national or local) or
state institutions (e.g. state universities), which will be responsible for contracting the works and
services and normally the legal owner of the infrastructure to be realised. Access to the
infrastructure must be guaranteed for all potential users on equal terms; if differentiated tariffs are
foreseen, detailed justification should be provided on a case-by-case basis;

The following minimum and maximum amounts apply to the grants for the individual projects,
which may be financed under the programme (Phare contribution):
• minimum amount : 50,000 Euro equivalent
• maximum amount : 650,000 Euro equivalent
The grant beneficiaries should provide a local contribution of at least 10% of the total cost of the
project. In kind contribution is allowed at market values, based on official estimates.

Eligible expenditures
Expenditures must be directly linked to achieving the purpose of the grant and appropriately
accounted for. Eligible expenditures could include investment costs related to the site
preparation, public utilities networks, main works, plant and machinery, supervision during
implementation, contingencies. Cost of land acquisition is eligible only as own (local)
contribution in kind.

Selection criteria
• The project should demonstrate that it will have a net positive impact in the area where it is
   implemented;
• Relevance to the small-scale infrastructure component objectives and to the priorities of the
   Regional Development Plan for the concerned area;
• Maturity of the project (feasibility study, including objective, location, quantified description,
   costs estimate, supervision arrangements and implementation schedule, detailed design and

                                                  23
    bills of quantity prepared, allowing to start tendering immediately), quality and consistency of
    the technical proposal
•   Linkage, integration or complementarities with other projects
•   Local and regional support to the project, the level of partnership established through the
    project
•   Cost-effectiveness
•   Envisaged quality assurance system
•   Local commitment to the preservation and development of the public asset base and
    project sustainability
•   Management capacities of the applicants (applicant’s previous experience in similar project,
    availability and experience of the implementation team, etc.)

Procedure for awarding grants
The Regional Development Agencies, for awarding grants on a competitive basis shall launch
open calls for proposals at regional level. A minimum period of 90 days will be given to the
applicants for the preparation of the projects. The projects that have not been selected can be
improved and submitted for the next selection.

The eligible costs, eligibility and selection criteria and procedures will be clearly specified in the
information package made available to potential applicants. In each region, a Regional Selection
Committee appointed by the Regional Development Board will carry out the technical and
financial appraisal of grant applications. The Regional Selection Committee shall comprise one or
more experts agreed by EC Delegation, as independent voting members and members from
RDA. MDP will compulsory participate in the Regional Selection Committee as observer; Ministry
of Tourism, EC Delegation and MEI may also participate in the Regional Selection Committee as
observers. The list of the selected projects will be approved by the Regional Development Board
and endorsed by the Delegation of the European Commission in Romania. The evaluation reports
will be submitted to the Ministry of Development and Prognosis and endorsed by the EC
Delegation.

Contracting
MDP will conclude a Regional Framework Agreement with each RDA for the technical
management of the project implemented under this component. Contracting grants shall be under
the responsibility of the Regional Development Agencies and Ministry of Development and
Prognosis.

Procurement following approval of grants will be the responsibility of the beneficiary and will follow
the provisions of the standard grant contract annexed to the Practical Guide for Phare, ISPA and
SAPARD.

The grant agreement signed between MDP, RDA and each beneficiary will specify that the
beneficiary will reimburse the grant or part of it, if the grant or part of it is not used in compliance
with the grant agreement terms. In addition, the grant contract or sub-contracts will specify the
conditions of infrastructure maintenance related to the granted project.

F. Awareness Campaign, Selection, Monitoring and Evaluation and Supervision
F.1. Awareness Campaign and facilitation of preparation of applications
F.2. Appraisal and selection of projects
F.3. Ex-ante evaluation, monitoring, control and on-going evaluation of projects financed under
this programme
F.4 Supervision of infrastructure projects implementation

The sound implementation of this programme implies that:
• A transparent and competitive process for projects selection is put in place, including large
   awareness campaign and publicity.
• Advice and helping applicants to develop good quality projects which can be financed


                                                  24
•   Close monitoring of the implementation process including ex ante appraisal and expert
    evaluation is ensured under the responsibility of the RDAs and of the MDP.
•   Ensuring financial control
•   An adequate implementation system is developed for the infrastructure type projects,
    including site supervision and inspection.

The indicative allocation by activity of the Phare funds available will be the following:
• Activity F1           3.3 Meuro
• Activity F2           0.7 Meuro
• Activity F3           will be supported from national contribution with 2.0 Meuro
• Activity F4           4.0 Meuro

F.1. Awareness Campaign and facilitation of preparation of applications
Awareness campaign and publicity will raise awareness of potential beneficiaries on the
availability of Phare support and modalities to access it. Information will be disseminated through
a diversity of channels in order to reach as many as possible potential beneficiaries, local mass
media, local SMEs associations, Chambers of Commerce, local employment offices, local
authorities Associations and NGOs. Support under this activity will include covering costs for
press advertisements, seminars and conferences, for editing, publishing, and disseminating
information materials, brochures, guidelines, etc.

A help desk will be established, by TA team, in each region to provide information and advice for
potential applicants.

At the end of the programme publicity will be organised to spread among the regions information
about the results of the programme and the implemented projects.

F.2. Appraisal and selection of projects
In achieving these tasks, the RDAs and MDP will be supported by external independent experts
who will be in charge of appraising the applications, participating in the selection procedure and
assessing the whole selection process.

For each component, a team of independent experts, supporting the MDP and the RDAs in the
co-ordination and implementation of the whole selection procedure and ensuring its transparency
and efficiency will be in charge of supporting each Evaluation Committee in selecting the
individual projects. This task will imply, among others, appraisal of applications reporting and
participation in the Selection Committee as voting members.

F.3. Ex-ante evaluation, monitoring, control and evaluation of projects financed under this
programme
Support to RDAs will be focused on three areas:

i) Ex-ante evaluation
Visits to the approved projects for financing, before contracting, will be carried out and a system of
ex-ante indicators and reports will be developed.

ii) Monitoring and control
The RDAs will get support in project monitoring during the implementation phases, including
support for developing systems for assessing the impact of each measure/activity, as well as for
actually measuring impact of each measure/activity.

Procurement
All procurement of goods, services and public works of each project shall be according to the
provisions included in the standard contracts annexed to the ‘Practical Guide for Phare, ISPA and
SAPARD’. Sub-contracting related to the project is permitted only under the Phare rules. All
procurement of services, equipment and other supplies, and works is permitted only from EU


                                                  25
countries or Phare countries. The RDAs will assist the beneficiaries to apply the Phare
procedures.

Romanian national public procurement rules will not apply to these EU-financed programmes,
both for the Phare funds and the co-financing by the state budget, including the case when the
beneficiary is a public administration.

iii) Evaluation
On-going evaluation of projects will be carried out and data will be recorded in a monitoring
database. Continuing follow-up of projects implementation and decisions and corrective actions
taken based on the level of fulfilment of indicators stated in the projects.

F.4. Supervision of infrastructure projects implementation
The Romanian authorities responsible for the implementation of the large-scale infrastructure
projects and of the ‘works’ activities contracted under the TVET component should ensure sites
technical supervision of the contractors’ work. Independent experts agreed by EC Delegation will
also supervise the implementation of these projects at regional and national level.

The independent experts will carry out the following activities:
• Analyse the existing contract supervision mechanisms and responsibilities for the
   infrastructure works and recommend improvements according to EU standards
• Supervise and control the works undertaken by the contractors responsible for the
   implementation of the infrastructure projects
• Ensure that an appropriate reporting and record-keeping procedure is followed by the
   contractors
• Audit a representative sample of works contractor invoices
• Consultancy services needed for the implementation phase
• Assist in the inspection and storage of material on receipt by Contractor
• Assist in reviewing the installation of material with supplier and purchaser
• Assist in performance testing of equipment
• Assist in the verification of all contractors technical data, shop drawings, specifications, etc, to
   ensure conformity with the tender documents
• Produce reports on the quality and performance of the works, material and equipment
   supplied and provide these reports to MDP and EC Delegation

Monitoring and Evaluation
MDP is responsible for the monitoring of the RDAs and the latter are responsible for the
monitoring of the projects, financed under the component. Experts from the line ministries will
support the RDAs, free of charge, in the evaluation of specific sub-programmes/components
when appropriate.

Monitoring should be carried out on the basis of information supplied periodically by the
beneficiaries, site visits, cross-checking, etc.

4.     Institutional Framework

The Ministry of Development and Prognosis will be both the Implementing Agency –
Contracting Authority and Paying Agency - for Investment in Economic and Social Cohesion
Programme financed under Phare 2001, with administrative and financial responsibilities.

The main tasks of Implementing Agency will include:
• the overall responsibility for the technical implementation of the programme, ensuring that the
   objectives of this proposal are met,
• co-ordinating the establishment and chairing the Steering Committee set up at national level;
• elaborating the selection and implementation procedures in accordance with the guidelines
   set by in European Union;


                                                 26
•   contracting the grants with the selected applicants, together with relevant RDA;
•   the overall responsibility for monitoring and evaluation of the programme and components;
•   acting as paying agency and ensuring the link with National Fund, RDAs and with the
    contractors/grant beneficiaries;
•   reporting to National Board for Regional Development and EC Delegation on the stage of
    implementation of the programme.

The Regional Development Agencies will act as Implementing Authorities, with the two
following exceptions: 1) the national Authority for Roads is Implementing Authority for the
National Roads financed under the Regional Infrastructure component and 2) the Ministry of
Education and Research is Implementing Authority for the equipment supply services contract
of the TVET component (see below point 6).

The specific implementation responsibilities and tasks of the RDAs, for the respective
development region, are:
• overall responsibility for monitoring and implementation of the projects from the region;
• prepare the grant contracts and conclude them with the selected applicants;
• accomplish the tasks related to monitoring and evaluation and ensure the link with MDP;
• report to Regional Development Board and to the MDP the stage of implementation of the
   programme.

At the National Level, a Steering Committee will be established, composed from representatives
of: the Ministry of Development and Prognosis, RDAs, Ministry of SMEs and Co-operation,
Ministry of Education and Research, Ministry of Labour and Social Solidarity, Ministry of Public
Works, Transport and Dwellings, National Administration of Roads, the Ministry of Water and
Environment Protection, , National Centre for Vocational and Technical Education Development,
Ministry of Youth and Sport, Ministry for European Integration, EC Delegation and other relevant
stakeholders identified at the national level for each component.

The Steering Committee will be chaired and serviced by MDP, which will therefore undertake all
the necessary administrative tasks (organising meetings, planning agendas, general secretariat)
and will produce all papers to be discussed at its meetings. The Steering Committee will play an
important consultative role by:
- secure that the actions implemented under the Economic and Social Cohesion Phare 2001 are
   in line with the National Development Plan and other relevant strategies;
- offering advice on procedures for the selection and implementation of the institution building
   and investment projects, and will play a role in each phase of the process;
- advice and information to identify financing sources for projects;
- participating in the monitoring of the Phare 2001 programme, both Institution Building and
   Investment components;
- providing an opinion on the Terms of Reference for evaluation of the Programme (mid-term
   and ex-post);
- participating in the selection of contractors for evaluations (mid-term and ex-post);
- participating in evaluations (mid-term and ex-post);
- advising on strategic directions to be taken in the Programme as a result of evaluation
   findings.

Meetings of the Steering Committee will be held quarterly, or more frequently if business
demands.

The Regional Development Boards will play an important role at regional level in both
institution building and investment components:
• approve the list of SMEs, social services and small-scale infrastructure projects to be
    financed under investment components;
• approve the target area specific objectives and priorities;
• approve the list of TVET schools and resource centres selected at regional level.


                                              27
The Regional Development Boards could invite in the meeting the relevant stakeholders/partners
for different components, including the local de-concentrated services of line ministries, in order to
ensure a broader partnership and commitment at regional level. Line Ministries and Ministry of
development and Prognosis, the Ministry of European Integration and the European Delegation
may attend the regional selection committees meetings as observers.

As is stated in the 151/1998 Regional Development Law, the National Board for Regional
Development will have the role to:
• approve the procedures for projects selection, implementation and monitoring of the
   selected projects; such procedures will be also endorsed by the National Fund and the EC
   Delegation;
• approve the list of SME, VET, social-services and small-scale infrastructure projects
   selected at regional level and approved by the Regional Development Boards
• approve the list of large-scale infrastructure projects proposed for financing.

Technical and Vocational Education and Training (TVET)
The MoER will supervise and co-ordinate the preliminary activities and work with the short
technical assistance under PPF of Phare 2000 to prepare all necessary documents for Phare
TVET 2001.

The project will create Regional Consortia of currently acting institutions formed by Regional
Development Agencies, Local (County) Committees for Social Partnership Development in VET,
County Councils, as well as the County School Inspectorates. The leading institutions will be
represented by the Regional Development Agencies, . The Regional Consortia will form a
consultative structure of the project and their main tasks will be:
   • selection of VET schools and resource centres which will take part in the project;
   • identification of training relevant for regional development.
   • selection of qualifications that will be developed within the project;
   • identification of occupational equipment to enable training relevant for regional
      development.

The regional level represents a concerted action of different key actors in order to maintain the
coherence of VET within the regional development policy.


5.     Detailed Budget (million Euro)

 MEURO                              Phare       Support              National      IFI*   Total
                                  Investmen     Institutio   Total   State
                                  t             n            Phare   Co-
                                                Building     =I+IB   financing
 A. Assistance to SMEs            15.00                      15.00   5.00                 20.00
 A1.     Grant      Support       12.00                      12.00
    Schemes
 A2. SME Counselling and          3.00                       3.00
 Advice Scheme
 B.    TVET      Investment       16.00                      16.00   5.33                 21.33
 Scheme

 C. Social services scheme        11.00         1.00         12.00   3.74                 15.74
 C1. Grant scheme for
 social services projects 11.00                              11.00   3.66                 14.66
 C2. Training in skills for
 social services                                1.00         1.00                         1.00
 D. Large-scale Regional 15.00                               15.00   5.00                 20.00


                                                 28
 Infrastructure
 E.              Small-scale 19.00                        19.00    6.33                  25.33
 infrastructure scheme
 F. Awareness Campaign,                        8.00       8.00     2.00*                 10.00
 Selection,  Monitoring
 and Evaluation, and
 Supervision
 F1. Awareness campaign                        3.3        3.3                            3.3
 and      preparation     of
 applications
 F2.      Appraisal     and                    0.7        0.7                            0.7
 selection
 F3. Ex-ante evaluation,                                           2.00*                 2.00
 monitoring, and evaluation
 F4. Infrastructure projects                   4.0        4.0                            4.0
 site supervision

 Total                           76.00        9.00     85.00 27.32                       112.32
* National co-financing gathered from the investment components

There could be reallocations between components if it is necessary, subject to approval by the EC
Delegation.

The budget allocated for the SMEs, social services and small-scale infrastructure components
will be distributed at regional level proportionally to the number of the inhabitants in the target
areas.


6.      Implementation Arrangements
6.1. Implementing Agency

The Ministry of Development and Prognosis, Strada Ministerului 2-4, Sector 1, Bucuresti, tel.
(401) 312 08 09, fax (401) 314 08 09 will be the Implementing Agency and Contracting Authority.
The PAO will be the Minister of Development and Prognosis.

The Regional Development Agencies will be the Implementing Authorities for the SMEs, VET
(works sub-component), social services and small-scale infrastructure components. The Ministry
of Education and Research will be the Implementing Authority for equipment supplies contracts
implemented under the VET component. The National Authority for Roads is implementing
Authority for the National Roads financed under the Regional infrastructure component.

The Ministry of Development and Prognosis and the Regional Development Agencies will closely
work with the partner governmental institutions relevant for the SME, VET, social services, large-
and small-scale infrastructure sectors, that will be actively involved in each phase of the process.

6.2. Twinning

No twinning arrangements are anticipated under this project.

6.3. Non-standard aspects

The “Practical Guide for Phare, ISPA and SAPARD” procedures will be followed under this
project. Romanian national public procurement rules will not apply to this EU-financed project,
both for the Phare funds and the co-financing by the state budget, including when the
beneficiary is a public administration.



                                                29
6.4. Contracts

6.4.1. Assistance to SMEs
MDP will conclude a Regional Framework Agreement with each RDA for the technical
management of the project implemented under this component. Contracting grants shall be under
the responsibility of the Regional Development Agencies and Ministry of Development and
Prognosis.

6.4.2 VET investment scheme
The two types of contracts (for works and supplies of equipment) shall be under the direct
responsibility of the Ministry of Development and Prognosis. MDP will conclude a Regional
Framework Agreement with each RDA for the selection of the schools and monitoring of the
works contract implemented under this component and a Framework Agreement with the Ministry
of Education and Research for the monitoring of the supplies contracts.

6.4.3. Social Services
MDP will conclude a Regional Framework Agreement with each RDA for the technical
management of the project implemented under this component. Contracting grants shall be under
the responsibility of the Regional Development Agencies and Ministry of Development and
Prognosis.

6.4.4. Regional/Large-scale Infrastructure
Contracting each project with the final beneficiary shall be under the responsibility of the
Ministry of Development and Prognosis. MDP will conclude a Framework Agreement with each
beneficiary for the implementation of the infrastructure sub-projects financed from local co-
financing and co-ordination of the all sub-projects. In the case of national road projects, the
contracts will be endorsed by the Ministry of Transport and Public Works/the National
Administration of Roads, as implementing authority.

6.4.5. Local/Small-Scale Infrastructure
MDP will conclude a Regional Framework Agreement with each RDA for the technical
management of the project implemented under this component. Contracting grants shall be under
the responsibility of the Regional Development Agencies and Ministry of Development and
Prognosis.
A public Authority – the grant beneficiary - will be responsible for the preparation of the public
works projects in accordance with the eligibility and evaluation criteria. Following approval by
the Regional development Boards and national Development Board and endorsement of project
lists by the Delegation of the European Commission in Romania, the grant beneficiary will be
responsible for contracting the works.

6.4.6. Awareness Campaign, Selection, Monitoring, and Supervision of Infrastructure
Projects
• MDP will conclude a TA contract for the activities to be undertaken for a large awareness
    campaign and advice to applicants.

•   MDP will conclude a TA contract, for the selection and appraisal of projects under each of
    the investment components, as members of the Regional Selection Committee.

•   MDP will conclude a contract with each RDA for the ex-ante evaluation, monitoring, control
    and on-going evaluation activities to be undertaken under each of the investment
    components.

•   MDP will conclude two contracts following international restricted tenders for the activities to
    be undertaken under the Site Supervision and Inspection of Large Infrastructure Projects
    and respectively TVET works contract

                                                 30
The Ministry of Development and Prognosis and the Regional Development Agencies will closely
work with the partner governmental institutions relevant for the SME, VET, social services, large-
and small-scale infrastructure sectors (such as Ministry of SMEs and Co-operatives, Ministry of
Education and Research, Ministry of labour and Social Solidarity Ministry of Tourism etc.), that will
be actively involved in each phase of the process.


7. Implementation Schedule

Activity              TORs/Project      Launching calls for Start of             project Project
                      specification/    proposals / start of activity                    completion
                      feasibility       tendering/selection of
                      studies ready     infrastructure projects
Activity A1.          12.2001           2.2002                  7.2002                     31.12.2005
Call for proposals
Activity A2           2.2002            4.2002                      9.2002                 31.12.2005
Call for proposals
Activity B1           4.2002            5.2002                      1.2003                 31.12.2005
Works contract
Activity B2           9.2002            10.2002                     6.2003                 31.12.2004
Equipment supply
Activity C1           4.2002            6.2002                      11.2002                31.12.2005
Call for proposals
Activity C2           1.2002            2.2002                      10.2002                31.12. 2004
Training of staff
Activity D            4.2002            5.2002                      1.2003                 31.12.2005
Works contracts
Activity E            2.2002            4.2002                      10.2002                31.12.2005
Call for proposals
Activity F1            10.2001          12.2001                     5.2002                 31.12.2004
Activity F2            10.2001          12.2001                     6.2002                 31.12.2004
Activity F3            2.2002           3.2002                      5.2002                 31.12.2005
Activity F4            3.2002           5.2002                      1.2003                 31.12.2005


8. Equal opportunity
All project mechanism will have equal access for women, men and disadvantaged groups.
Particular projects will be developed and selected for SMEs owned and operated by women and
young people.

The VET and the social services sub-components are developed in order to ensure equal
opportunities to vocational education, training and social services of individuals and groups at
risk/in need as mentioned above. The project will develop promotional and training activities at
national, regional and local level to encourage girls and young women to follow technical careers
through vocational education and training institutions, including business and administration
careers. The partners involved in the project will include interested women/professional
associations or trade groups.

9. Environment
The environmental protection is one of the top priorities and adequate support will be required
under Phare and ISPA assistance provided in 2000. The measures implemented under the
project will therefore be complementary to the measures implemented with ISPA. PHARE will
only co-finance works when responding to EU environment standards. Environmental Impact
Assessment will be carried out following EU Directive n° 85/337/EEC.



                                                 31
Specific selection criteria and indicators will be applied in accordance with the experience of the
Structural Fund's activities, including for investment in SMEs development.

VET Environmental aspects will be considered in a structured way with particular reference to
environmental sustainability concept as regards the Regional Development Plans, selection of the
didactic equipment and technologies recommended for training.

On the institutional side, particular attention will be given to participation of relevant environmental
authorities (Ministry of Environment and Local Environmental Agencies) and groups to the
decision making process.

10. Rate of Return
Projects will include feasibility studies with economic and financial analysis or cost-benefit
analyses whenever appropriate. Regional income is expected to grow.

11. Investment criteria

11.1 Catalytic effect:

A. Assistance to small and medium sized enterprises
SMEs in the target regions are confronted with limited access to investment finance and low
provision of quality business support services. Therefore, small-scale finance supplemented by
technical assistance and advice should reduce the failure rate of start-up businesses, and bring
increased sustainability of the new jobs generated, as well as enhance the development potential
of existing SMEs.

B. VET investment scheme
The development regions are already confronted with high levels of unemployment affecting
young population, or will be confronted with sharp raises of the unemployment, as the structural
reform and industrial restructuring measures will be implemented. Therefore, there is in these
regions a strong demand to complement restructuring measures with effective VET as a tool for
improving labour market integration. Also, the resumption of sustainable economic growth and the
development of private enterprises need a flexible, skilled and adaptable labour force.

C. Social services development scheme
The development of community social services represents an alternative system to
institutionalisation and a condition to respect the rights of each person to choose the place of
living. The efficiency of social service network depends on the financial resources, professional
skills of the staff, working methods and co-operation with civil society. The present project will
develop the institutional capacity of the municipalities to provide some social services directly or to
act as agent and catalyst in stimulating the provision of these services in partnership with other
agencies, public, private and non-profit organisations.

D. Local and regional infrastructure
The development regions have an unsatisfactory transport, environment and business
infrastructure. Therefore, there is in these regions a strong demand for systematic tools for
improving the overall quality of the transport network, introducing significant environmental
activities and strength the business infrastructure.

E. Local/Small-scale Infrastructure
By their multiplying effect, urban regeneration and tourism infrastructure development act as a
dynamic element of global economic system, supporting the diversification of the structure of
national economy and being an effective source of national revenue, attracting investments and
bringing a contribution to equilibration of external payment balance.




                                                  32
11.2 Co-financing
In compliance with Phare Guidelines, 25% national co-financing for investment projects (equal
to MEURO 31.00) will be provided from the state budget, corresponding with the Phare
contribution for investment components of MEURO 93.00. State budget co-financing will cover
25% of the total public support (Phare + State budget co-financing).

The financing scheme for each project under Regional and Local Infrastructure may include
local or IFI co-financing. Where the co-financing is provided from national budgetary funds the
co-financing must be released at the same time as Phare funds to facilitate smooth
implementation of the projects.

Clear evidence of that national co-financing from the state budget has been provided will be
made available to the Joint Monitoring Committee, which has the responsibility to monitor the
fulfilment of the co-financing requirements. If no proof is presented the respective amounts may
be deducted from the possible Phare allocations in the following years.

The national state co-financing will be implemented following the same procedure as the Phare
funds, for the entire cycle of the project.

•   Regional Development Agencies through MDP, will be responsible for reporting to the
    Commission (EC Delegation) about the implementation and the results achieved.
•   National Fund will ensure this co financing and the mechanism for delivering the funds to MDP
    and to the development regions
•   When the direct beneficiaries of the projects will be private legal entities, an adequate co
    financing will be provided by the private sector.

11.3 Additionality
The project will not generate competition with any private service providers, and no other
financiers will be displaced by the Phare intervention, in particular as the project target mainly
beneficiaries whose demand for financing and training measures, are still unmet by the private
sector.

11.4 Project readiness and Size
Terms of Reference and contracts for the project are being prepared by taking into account the
studies already carried out at the regional level by the Regional Development Agencies, with the
support of the Technical Assistance provided by Phare 2000 Programme.
Implementation will be ensured by the RDAs, under guidance and monitoring of the Ministry of
Development and Prognosis adequately assisted by the Phare supported technical assistance
already in place.

Terms of Reference and contracts for the project are being drafted by taking into account the
studies carried out at the regional level by the RDAs. The institutions directly involved in the
implementation of the project (the MDP and the RDAs) are adequately assisted by the Phare
supported technical assistance already in place.

11.5 Sustainability
• The national regional development policies of Romania ensure the sustainability of the project
• Projects shall be in compliance with state aids provisions
• Investments must respect the state aids provisions of the Europe Agreement.
• The programme represents a contribution to National Development Plan
• Investment Support from Development of Regional and Local infrastructure projects must be a
   feasible part of the regional development strategy from development regions, as defined in the
   National Development Plan.

11.6   Compliance with state aids provisions



                                               33
12. Conditionality and sequencing

The co-financing by the Government is a pre-condition for the effective operation of the
programme.

Phare support for the TVET component will be delivered on the basis of a plan for
rationalisation of the TVET school network which will identify those schools best able to provide
training in line with the expected future demands of the labour market. The Ministry of
Education and Research will issue an order on the rationalisation of the system in advance of
launching of procurement on the equipment component and contracting of the works
component.

Launching of B1 TVET Works component depends also on:
• Finalisation by November 2001 of the selection process of the schools in the 11 priority areas;
   schools have identified future qualifications needed in the area;
• The identified needs for refurbishing the schools and the construction specifications
   developed;
• Technical specifications for specialised equipment for the workshops exist when ToRs for
   works will be designed.




                                               34
ANNEXES TO PROJECT FICHE



1. Logical framework matrix in standard format (compulsory)
2. Detailed implementation chart (compulsory)
3. Contracting and disbursement schedule by quarter for full duration of programme
   (including disbursement period) (compulsory)
4. Reference to feasibility /pre-feasibility studies. For all investment projects, the
   executive summary of the economic and financial appraisals, and the environmental
   impact assessment should be attached (compulsory)
   4.1. Linked activities
   4.2. Definition of priority areas
   4.3. SWOT analysis of priority areas
   4.4. Relevant Stategic Plans and studies for SMEs
   4.5. VET SWOT analiysis
   4.6. VET 2002
   4.7. Summary of implementation procedures
5. List of relevant Laws and Regulations
6. Large scale infrastructure portofolio of projects




                                          35
                                                                                           Annex 1 : Logframe Matrix for project: RO0108.03



ANNEX 1 - GENERAL LOGFRAME PLANNING MATRIX FOR PROGRAMME                                                    Programme              RO0108.03
                                                                                                            number
                                                                                                            Contracting            Disbursement
INVESTMENTS IN ECONOMIC AND SOCIAL COHESION - 2001                                                          period expires:        period expires:
INTEGRATED REGIONAL MEASURES                                                                                30.11.2003             30.12.2005

Programme Number                                                                                            Total Budget:  Phare contribution:
                                                                                                            (MEURO)        (MEURO) 85.00
                                                                                                            111.42
Wider Objective                             Indicators of Achievement*        How, When and By Whom         Assumptions and Risks
                                                                              Indicators Will Be
                                                                              Measured
•      To     support    the   Romanian     •   Positive assessment in        • Programme evaluation by     •   Political and macroeconomic
    Government to implement an                  the pre-accession                the European                   stability
    integrated pluri-annual regional            framework of that the            Commission;                •   Continuing fulfilment of the
    development         policy    through       economic and social           • Periodical reports to EC        conditions for receiving EU grant
    investment projects in priority
                                                cohesion objectives in the       Delegation;                    assistance
    sectors, in order to enhance the
    indigenous economic and social              Accession Partnership         • Evaluation Reports on       •   Development of           national policy for
                                                have been met                    implementation progress;       economic and social cohesion according
    potential of the identified target                                                                          to EU’s policy in this field
    areas facing severe industrial                                                                          •   Favorable economic growth conditions
    restructuring and demonstrating         •   All investment funds                                            exist or at least no sharp economic
    potential for economic growth, in           (Phare 2001) committed;                                         downturn occurs so that the number of
    line with the provisions of the                                                                             sustainable jobs created is maximized
    National Development Plan (NDP)         •   Efficiency with which                                       •   Continuing commitment of
    and in close correlation with the           investment money are                                            national and regional authorities to
    institution building support provided                                                                       support regional development
                                                used.
    for designing national economic and
                                                                                                                policy
    social cohesion policies in line with
    the EU policies and practices.          •   Increased regional GDP                                      •   Continued Government
                                                and improved                                                    commitment to restructure the
                                                employment                                                      economy and improve conditions

*
    Must be quantified and measurable

                                                                             36
                                                                                   Annex 1 : Logframe Matrix for project: RO0108.03


                                      •                                                                 for private sector development
                                      •   Improved socio-economic
                                          conditions in the target
                                          zones




Immediate Objectives                  Indicators of Achievement*      How, When and By Whom         Assumptions and Risks
                                                                      Indicators Will Be
                                                                      Measured
A.Assistance to small and
medium sized enterprises              • Number of jobs created        Reports from the implementing • Local and regional actors support
                                                                             agencies
• To foster investment for the          and maintained as a result                                    the implementation of the project.
   establishment       of     new       of the project                                              • Implementing institutions have
                                                                       Statistics
   enterprises       and       the    • Number of SMEs                                                adequate institutional capacity
                                                                    •
   development of existing micro        accessing grants, out of
                                                                       Feed-back from direct
   and young enterprises in order       which number of SME
                                                                       beneficiaries
   to    increase    the    overall     taking grants for
   contribution of Micro, Small         investment in new
                                                                       Analyses of files,
   and Medium Sized Enterprises         machinery, equipment
                                                                       observations, surveys (if
   (SMEs) to the creation of            technology etc with
                                                                       available)
   employment and sustainable           support provided by the
   economic     growth    in   the      project
                                                                       Reports from Small
   targeted zones;                    • Number of sustainable          Business Associations,
• To support investment in              start-up and new               Chambers of Commerce,
   existing micro and young             entreprises                    NGOs and Ministry for
   enterprises in order to create     • Turnover of the SMEs           SMEs and Co-operatives
   new jobs in the targeted zones       benefiting of grants, total
   and develop, diversify and           and per target zone            Programme evaluation by
   improve the quality and            • Number of participants in



                                                                     37
                                                                                     Annex 1 : Logframe Matrix for project: RO0108.03


   quantity of products and           information and training           European Commission
   services offered.                  sessions
• To support SME access to • Number of relevant events
   business support services and      organised for the
   training for improving skills in   promotion of the projet
   preparing      and     managing
   projects as well as to improve
   access to information and
   communication and to enhance
   the market opportunities for
   SMEs.
B.Technical      and    Vocational                                                                   The funding of the actual programme
Education and Training (TVET)       • Rationalised three level           Reports by regional         on multi-annual phases (Phare 2001,
• To strengthen and consolidate        TVET system and                   consortia/county schools    Phare 2002) is subject of annual
  the achievements of the reform       additional apprenticeship         inspectorate                decision and would be conditioned
  acquired through the Phare           schemes (school based                                         upon the achievement of the general
  VET RO 9405 programme for            and community based) for          Periodic Phare evaluation   benchmarks:
  initial TVET; and to support the     people with special needs         reports                     • Rationalised TVET school network
  rationalisation      and      the                                                                     ageed with the social partners and
  modernisation of the present • Phase 1 of multi-annual                 Programme monitoring           public authorities
  TVET system;                         investment programme              reports                     • improved financial allocation to
• To contribute in reviewing           completed - renovation of                                        TVET from the public budget;
  responsibilities, governance and     selected TVET schools                                         • rationalised TVE school network
  accountability mechanisms in         and vocational workshops                                         agreed with the social partners
  the provision of initial TVET in     and provision of IT                                              and public authorities;
  line with the social and             equipment, resources                                          • effective       social     partnership
  economic       development     as    centres inside and outside                                       institutions supporting TVET at
  stated      in    the    National    target zones equipped and                                        local,    county,     regional   and
  Development Plan;                    renovated.                                                       national level;
• To contribute in ensuring equal                                                                    • formal support of the County
  chances for all young people to • Decentralised school                                                Councils, Local Councils and
  obtain a good professional           planning at the                                                  County      School      Inspectorates
  qualification at a level equal to    regional/area level by use                                       related     to     the     equipment

                                                                    38
                                                                                              Annex 1 : Logframe Matrix for project: RO0108.03


   European       standards,  by              of institutional Regional                                              investment in schools (allocation
   providing TVET which responds              Consortia and Regional                                                 of funds for preparation of
   flexibly to the needs of each              Action Plans                                                           premises, full use of equipment,
   individual.                                                                                                       maintenance and repairing).

C.Social Services investment scheme
                                            • The mobilisation of several The independent final (2005)           •   Favorable economic growth
• To develop the capacity of the social       similar projects initiated or              evaluation will             conditions exist or at least no
assistance system in Romania to respond
to the needs of the citizens by creating
                                              to be initiated by the local               assess the                  sharp economic downturn occurs
appropriate community social services for     authorities in the target                  achievements                so that the number of sustainable
vulnerable groups in areas facing social-     areas                                      of the project in           jobs created is maximized.
economic        difficulties    including                                                terms of                •   Central, municipal or donor
reorganisation and rehabilitation of                                                     sustainable jobs
                                            • Number of young and                                                    funding is available for replication
selected hostels for elderly persons and
development of home care services for         unemployed people                          created and its             of the project or similar local social
elderly people;                               finding a job and being                    replication.                service initiatives.
                                              trained                                                            •   Vulnerable groups' needs and
• To support social inclusion,                                              A satisfaction survey of the             tools to improve their life
poverty reduction and effective             • Number of sustainable         participants of the 11 target            conditions are properly identified
labour market integration of the              social services projects      areas will be conducted at               and implemented.
vulnerable social groups in the 11            created or improved           the end of the project.              •   Unemployed people are willing to
target areas undergoing severe                                                                                       participate in the project.
industrial restructuring;                   • The percentage of the              An assessment of similar
                                              population of the 11 target        initiatives implemented or to
• To strengthen the capacities of regional    areas satisfied with the           be implemented by the
and and local administrations to build        improved quality of life           municipalities and partners
effective and innovative local partnerships                                      will be worked out
in implementing social service initiatives
                                              and the social impact of
                                              the project.




                                                                            39
                                                                                                Annex 1 : Logframe Matrix for project: RO0108.03


D.Regional/large-scale infrastructure
• To      upgrade      regional  transport   •   Number of km of regional          Site supervision reports and   •   Regional and local authorities
   infrastructure for improving access to
   economic areas and strengthening              transport infrastructure          final report                       support the projects;
   linkage between economic poles and            developed/improved
   European transport corridors;             •   Number of locations               Programme evaluation by        •   Effective implementation of the
•   To     develop      infrastructures          developed for modern              the European Commission            infrastructure projects financed
    supporting       business       and          industrial activities;                                               from Phare 2000
    tourism development, in order            •   Number of business
    to strengthen competitiveness                infrastructure centers                                           •   Co-financing available
    of SMEs through better access                improved permitting the
    to    technologies,       services,          creation of a minimum
    markets and information;                     number of jobs;
•   To rehabilitate degraded sites           •   Number of industrial sites
    or to protect environmentally                rehabilitatated;
    vulnerable sites with economic           •   Number of km of tourist
    potential     (industrial     sites,         infrastructure (access
    closed enterprises from urban                roads, restoration works);
    heavily polluted areas, natural          •   Number of new jobs
    sites and area with tourist                  created in local and
    potential),     with     particular          regional infrastructure
    attention to the remediation of              projects;
    the     severely       contamined
    industrial sites;
E.Small-scale      local   infrastructure
scheme                                       •   Number of km of sewege/ Monitoring data supplied by              • Commitment of the beneficiaries
•  To improve the local infrastructure, in
   order to increase the attractiveness of       running water pipes          the beneficiaries to the              to the project
   the urban areas for inward investment,        built/improved in urban      RDAs                                • Maturity, quality and consistency
   to rehabilitate the urban environment         areas;                                                             of the projects submitted;
   and increase the quality of life of       •   Number of sqm of land     Progress reports provided by
   communities suffering from industrial                                      the the RDAs to MDP
   restructuring;
                                                 enviromentally recovered
•  To rehabilitate the historical and            for investment in urban
   cultural built heritage, in order to          areas;                    Programme evaluation by the
   improve the tourism and business          •   Number of buildings/sites    European Commission

                                                                              40
                                                                                  Annex 1 : Logframe Matrix for project: RO0108.03


    attractiveness of the urban areas.         rehabilitated and
                                               reintroduced in the
                                               internal and international
                                               touristic circuit, in urban
                                               areas;
                                           •   Number of km of tourist
                                               infrastructure (access
                                               roads, restoration works);
                                           •   Number of new jobs
                                               created in local and
                                               regional infrastructure
                                               projects;

F.Awareness Campaign, Projects
Appraisal and Selection, Monitoring, and
Supervision
•  To promote measures and provide         •
                                      Number of promotion        Reports provided by
   information and advice on project  events organized;            contractors to MDP
   preparation                      • Good quality information
•  To ensure a transparent , competitive
                                      and advice to applicants
   and sound process for project
   appraisal and selection.         • Monitoring and control
•   To ensure an appropriate and      procedures developed and
    effective implementation for      site-visits undertaken
    projects financed under this    • Creation of appropriate
    programme, through ex-ante        and effective
    evaluation, close monitoring      implementation,
    and control.                      evaluation and control
•   To develop and sustain an         systems for infrastructure
    adequate         implementation   and small investment
    system for the infrastructure     projects;
    type projects, including site
    supervision and inspection



                                                                             41
                                                                                       Annex 1 : Logframe Matrix for project: RO0108.03


Results                                Indicators of Achievement         How, When and By Whom           Assumptions and Risks
                                                                         Indicators Will Be
                                                                         Measured
A. Assistance to small and medium
               sized enterprises                                         • Monitoring systems of         •   Intensive training provided to
                                       •   Investment support to           RDAs, reports and                 entrepreneurs and information
•   Grant Contracts concluded to           min. 40 entrepreneurs           payments made to                  campaign launched prior to calls
    aid investment in start-up,            starting their own              beneficiaries                     for proposals
    micro and existing SMEs                business                      • Reports by RDAs to MDP        •   High number of SMEs able to
•   SMEs benefiting from training      •   Increased survival rates        on the progress of projects       prepare and submit viable
    and      counseling     services       (beyond 2 years) of start-    • MDP reports and statistics        investment projects;
    directly related to investment         up SMEs                                                       •
                                                                         • Documentation on selection        Preparation of the projects ready
    grants                             •   Min. 20 grants per zone                                           in due time at quality standards
                                                                           and approval of projects by
•   Increased entrepreneurship by      •   SMEs which were granted         National Board for Regional       required;
    new business creration and             funds under the                 Development and EC            •    SMEs interested and willing to
    self employed                          programme increase              Delegation                        take part in project activities;
•   Increased responsiveness of            turnover by 10-15% per        • Feedback from direct
    training and counseling                year                            beneficiaries
    providers to market                •   Increased quality and         • Phare evaluation reports
    requirements                           range of advice services
                                           offered by provider
                                           organisations to SMEs in
                                           the target areas
                                       •   Min. 300 SMEs
                                           beneficiaries of training
                                           and counselling
                                       •   Around 1000 new jobs
                                           created

B. Technical and Vocational
Education and Training (TVET)          •   Around     100     TVET • Reports by Regional                 •   Procedures for selection and
• Endowment of TVET schools                schools, out of which 11 Consortia / County School                evaluation of schools and
   with computer networks and              resource         centres  Inspectorates;                          resources centres are designed

                                                                        42
                                                                                      Annex 1 : Logframe Matrix for project: RO0108.03


    office equipment;                        benefiting from building • Periodical Phare evaluation        and applied;
•   Enabling access to information           rehabilitation   and    IT   reports;                     •   Responsible involvement of local
    and documentation;                       equipment                  • Programme monitoring             actors (schools, county schools
•   Improved training facilities for •       Around 1,000 computers,      reports;                         inspectorates, etc) in the decision
    trainers and trainees;                   400 printers, 100 servers,                                    making process regarding needed
•   School buildings rehabilitation,         100      scanners,    100                                     equipment/works;
    including        repairs       and       overhead projectors, 100                                  •   Adequate technical specifications
    consolidation, provisions of             LDC pnels, 100 Tvsets,                                        for IT equipment;
    essential     utilities,   training      100 video players, 100
    clasrooms       and      vocational      copy machines, 100 faxe
    workshops         upgrade        for     machines, 100 flipcharts;
    installing the IT equipment;         •   11 resources centers in
                                             the target areas and 11
                                             resources centers outside
                                             the 11 zones equiped,
                                             including       multimedia
                                             projector and laptop

C.Social Services investment
scheme                             • Establishment of around           The independent final (2005)    •    Promotion campaign and
• Development of a modulized         100       social     service      evaluation will assess the          participation in the programme is
  vocational training system and     activities;                       achievement of the project in       intensive
  delivery of the training to the • improved conditions in 15          terms of sustainable jobs
  workforce to be employed in        institutions    for   elderly     created and its replication     •   Training institutions readiness to
  social service projects.           people;                                                               adapt training programmes
• Improved skills of the social • Around          800     people       A satisfactory survey of the        according to the needs of the
  service workers                    trained in social sevices         participants of the 11 target       programme
• Increasing and improvement of      skills and 20 trainers;           areas will be conducted at the
  social services                  • Around 400 new jobs               end of the project             •    Unemployed willing to participate
• Partnership       culture     is   created in social services,
  extending                          out of which 25% for the          An assessment of similar
                                     unemployed;                       initiatives implemented or to
                                   • around 120 temporary              be implemented by the

                                                                      43
                                                                                            Annex 1 : Logframe Matrix for project: RO0108.03


                                                working      places      in municipalities and partners
                                                construction/building.
D. Regional/ large-scale infrastructure
•   the improvement of regional             •   Around 400 of road km. of     Sites supervision reports and   •   Regional development authorities
    transport infrastructure                    regional transport            final report                        and regional and local partnership
    strengthening linkage between               infrastructure improved in                                        support the projects
    economic poles and European                 the effectiveness             Programme evaluation by the
    transport corridors will be                 conditions.                   European Commission
    realised;                               •   Around 4 business
•   the improvement of business                 infrastructure centers
    infrastructures and communication
    infrastructure in order to permit
                                                improved permitting the
    better access to services and               creation of a minimum
    markets of SMEs for strengthening           number of jobs
    competitiveness, will be realised;      •   4 industrial sites
•   the rehabilitation of the                   rehabilitated
    environment of degraded                 •   Around 1000 of new jobs
    industrial sites or closed                  created in regional
    enterprises from urban areas,               infrastructure projects
    for improving the conditions of
    life and for stimulate
    economical development will
    be realised;


E. Small-scale local                        •   Around 100 km of local        Monitoring data supplied by
infrastructure                                  transport infrastructure      the beneficiaries to the RDAs
•   the improvement of urban                    modermised/rehabilitated;
    infrastructure in the priority areas,   •   Around.100 km of              Progress report provided by
    in order to attract inward
    investments for business activities         environmental                 the RDAs to MDP
    will be realised;                           infrastructure (water
•   rehabilitation/modernisation of             supply, sewege network,       Programme evaluation by the
    environmental infrastructure will           waste-water treatment,        European Commission
    be realised as for improving urban          waste disposal)

                                                                             44
                                                                                              Annex 1 : Logframe Matrix for project: RO0108.03


    infrastructure;                            rehabilitated, in the 11
•   improvement the touristic                  priority urban areas;
    attractiveness of the cities, mainly
    those suffering from industrial        •   5
    restructuring;                             historical/cultural/religious
                                               buildings rehabilitated;
                                           •   Around 1000 jobs
                                               created;

F. Awareness Campaign, Projects
Appraisal and Selection, Monitoring and    •   Min 30 of promotion and          Newspapers                   •   Technical assistance under this
Supervision
                                               information events                                                component coordinated with grant
•   Focused and intensive
                                               organised (conferences,          Reports of RDAs                  schemes implentation
    promotion campaign
                                               workshops)
•   Incresed impact on the                                                      Reports provided by the
                                           •   Number of articles in
    applicants and improved                                                     contractors to the MDP
                                               newspapers and
    quality of applications
                                               brochures
    submitted for financing                                                     Applications submitted
                                           •   Number of potential
•   Improved projects appraisal,
                                               applicants receiving
    selection and contracting
                                               advice
    process
                                           •   Regional selection
•   Improved and effective ex-ante
                                               committees with
    evaluation and monitoring and
                                               individuals specialized for
    control process
                                               each component
•   Effective infrastructure works
                                           •   Number of applications
    supervision and inspection
                                               submitted
•   Improved supervision,
                                           •   Creation of an appropriate
    responsibilities distribution,
                                               and effective monitoring,
    reporting and record-keeping
                                               evaluation and control
    procedures
                                               system

                                                                                                             Preconditions
Activities                                 Means
• Preparation of information               •      Technical Assistance will

                                                                               45
                                                                                 Annex 1 : Logframe Matrix for project: RO0108.03


    packages for components A,            support the prparation of                             • Government co-financing (25%) is
    C1, E                                 documents needed for                                    ensured
                                          launching calls for proposals
•   Designing ToRs for technical          and tenders                                           • TA is contracted in due time
    assistance components, C2,        •         Promotion and information
    F1, F2, F4                            campaign
•   Tendering and contracting the     •         Brochures and other
    technical assistance                  documentation on different
                                          components
•   Preparing and concluding          •         Training seminars and
    contracts with RDAs for               advice
    monitoring of projects (F3)       •         Personnel from all
•   Launching calls for proposals         institutions involved (MDP,
    for components A, C1, E               RDAs, and line ministries)
                                      •         Providing premises and
•   Organising seminars and               minimum equipment necessary
    providing information to              to implement the programme
    applicants
•   Evaluation and selection of
                                      Phare grant     (Meuro)
    projects                          - Projects                76.0
•   Observation and checking of       - Technical assistance
    the selection process             9.0
•   Concluding contracts with
    approved projects for financing   National funds
•   Ex-ante evaluation, monitoring    - Projects          24.42
    and control of projects           - Technical assistance
•   Reporting at different levels     2.0
•   Payments to projects
•   Tendering and contracting
    compnents B1 and B2
•   Tendering and contracting
    component D




                                                                            46
                                                                                   Annex 2 - Detailed implementation chart for project: RO0108.03


                                                DETAILED IMPLEMENTATION CHART – INVESTMENT
                                                   Economic and Social Cohesion – Phare 2001

      Activities             2001                2002                                 2003                           2004                          2005
  Calendar months           S O N D   J   F M A M J   J   A S O N D   J   F M A   M   J   J   A S O N   D   J F M A M J   J   A S O N D J   F M A M J   J   A S O N   D

A. Assistance to SMEs
A1.Grant Support Scheme
                            D D D D D C C C C C I I I I I I I I I I I I I I I I I                       I   I I I I I I I I I
A2. SME Counselling and
Advice Scheme
                                      D D D C C C C C I I I I I I I I I I I I I I I                     I   I I I I I I I I I
B. TVET Investment Scheme
B1. Works
                                      D D D D C C C C C C C C I I I I I I I I I I I                     I   I I I I I I I I I
B2. Equipment supply
                                                  D D D D C C C C C C C C I I I I I I                   I   I I I I I I I I I
C. Social Services Scheme

C1. Grant Scheme
                                      D D D D D C C C C C I I I I I I I I I I I I I                     I   I I I I I I I I I
C2. Training for services
                            D D D D D C C C C C C C C I I I I I I I I I I I I I I                       I
D. Large-scale Regional
Infrastructure
                            D D D D D D D D C C C C C C C C I I I I I I I I I I I                       I   I I I I I I I I I I I I I       I I I I I
E. Small Scale
Infrastructure Scheme
                                      D D D C C C C C C I I I I I I I I I I I I I I                     I   I I I I I I I I I I I I I       I I I I I
F1. Awareness
Campaign
                            D D D C C C C C I I I I I I I I I I I I
F2. Appraisal and
Selection
                            D D D C C C C C C I I I I I I I I I I I I
F3. Monitoring
                            D D D D D D C C I I I I I I I I I I I I I I I I I I I                       I   I I I I I I I I I
F4. Site Supervision of
Infrastructure Projects
                                      D D D D C C C C C C C C I I I I I I I I I I I                     I   I I I I I I I I I I I I I       I I I I I I I I

                            D = Design;     C = Tendering and Contracting;             I = Implementation




                                                                              47
                                    Annex 3 –Cumulative contracting and disbursement schedule by quarter for project: RO0108.03

                                                                      INVESTMENT
                                                         Economic and Social Cohesion – Phare 2001


CUMULATIVE CONTRACTING AND DISBURSEMENT SCHEDULE (Meuro 85.00)



               31/03   30/06     30/09       31/12        31/03       30/06       30/09       31/12       31/03       30/06       30/09       31/12       31/03       30/06       30/09       31/12
               2002    2002      2002        2002         2003        2003        2003        2003        2004        2004        2004        2004        2005        2005        2005        2005
A. Assistance to SMEs
A1. Grant Support Scheme
CONTRACTED                  12       12          12           12          12          12          12
DISBURSED                                7           7            7           7           7           8           9       10          11          12          12          12          12         12
A2. SME Counseling and Advice Scheme
CONTRACTED                               3           3            3           3           3           3
DISBURSED                           1.5         1.5          1.5         1.5         1.8         1.8         1.8         2.2         2.6              3           3           3           3           3
B. TVET Investment Scheme
B1. Works
CONTRACTED                                       11           11          11          11          11
DISBURSED                                                    1.1              2           4           6      7.5         8.5         9.5          11          11          11          11          11
B2. Equipment Supply
CONTRACTED                                                                    5           5           5
DISBURSED                                                                1.5         1.5         1.5              4           4           4           5           5           5           5           5




                                                                                     48
                                         Annex 3 –Cumulative contracting and disbursement schedule by quarter for project: RO0108.03

                  31/03   30/06       30/09       31/12       31/03       30/06       30/09       31/12       31/03       30/06       30/09       31/12       31/03       30/06       30/09       31/12
                  2002    2002        2002        2002        2003        2003        2003        2003        2004        2004        2004        2004        2005        2005        2005        2005
C. Social Services Scheme
C1. Grant Scheme
CONTRACTED                                            11          11          11          11          11
DISBURSED                                                 6           6           6           6           8           8           9       10          11         11          11          11           11
C2. Training for Social Services Skills
CONTRACTED                                    1           1           1           1           1           1
DISBURSED                                            0.2         0.3         0.5         0.7         0.9              1           1           1           1           1           1           1           1

D. Large scale Regional Infrastructure

CONTRACTED                                            30          30          30          30          30
DISBURSED                                                             3           6           9       12          15          18         21           23         25          27          30           30

E. Small scale Infrastructure Scheme

CONTRACTED                                20          20          20          20          20          20
DISBURSED                                             10          10          10         10           11         12          14          15           16         18          20          20           20

F1. Awareness Campaign

CONTRACTED                    3.3        3.3         3.3         3.3         3.3         3.3         3.3
DISBURSED                         1      1.8         2.3         2.8         3.3         3.3         3.3         3.3         3.3         3.3         3.3         3.3         3.3         3.3         3.3

F2. Appraisal and Selection

CONTRACTED                    0.7        0.7         0.7         0.7         0.7         0.7         0.7
DISBURSED                     0.1        0.3         0.5         0.6         0.7         0.7         0.7         0.7         0.7         0.7         0.7         0.7         0.7         0.7         0.7




                                                                                         49
                                         Annex 3 –Cumulative contracting and disbursement schedule by quarter for project: RO0108.03

                  31/03   30/06       30/09       31/12       31/03       30/06       30/09       31/12       31/03    30/06    30/09    31/12       31/03    30/06    30/09       31/12
                  2002    2002        2002        2002        2003        2003        2003        2003        2004     2004     2004     2004        2005     2005     2005        2005

F3. Monitoring

CONTRACTED                        2           2           2           2       22              2           2
DISBURSED                    0.2         0.3         0.4         0.5         0.6         0.8              1      1.2      1.4      1.7      2.0         2.0      2.0      2.0         2.0

F4. Site Supervision of Infrastructure projects

CONTRACTED                                                4           4           4           4           4
DISBURSED                                                        0.6         0.8              1      1.4         1.8      2.2      2.6           3      3.3      3.6           4           4




                                                                                         50
                    Annex 4 – Reference to feasibility studies for project : RO0108.03
ANNEX 4.1 : Linked Activities


EU/Phare Programme on Active Employment Measures “PAEM” (RO 9209.01)
The PAEM programme supported the Romanian Government in the development and
implementation of labour market policy and reform, through the implementation of 66 local
projects of active employment measures in 57 localities of Romania. The programme was
administrated by FIMAN. The local projects were designed and implemented in partnership
within the context of a local development plan and included: information and mediation centres;
business incubators; centre for the promotion of agro-tourism; job clubs; public works;
vocational training; entrepreneurial development in schools; job placement centres; small
business development centres; mobility centres within restructuring entreprises; employment
services for disadvantaged categories of unemployed people; temporary labour agencies, etc.
35,000 persons were assisted by information centers, 20,000 unemployed persons were
supported by mediation, 1,000 persons participated in entrepreneurial training courses, 1,500
persons attended the job clubs, 10,500 persons were placed in jobs and 3,075 new jobs were
created. The total budget of the programme was 10 Meuro. The active employment measures
of RICOP will make full use of PAEM experience.

EU/Phare Social Services Development Programme             “SESAM” (RO 9209.03 and RO
9305.02)
The programme was managed by the Ministry of Labour and Social Protection. The
objective of the SESAM programme (5.5 Meuro) was to support the Romanian
authorities in the decentralization and diversification of social services through the
promotion of 41 innovatory projects in more than 25 counties of Romania. The projects
were developed through partnerships (public authorities – NGOs) and were based on a
co-financing principle (50% Phare – 50% local contribution). Phare support was
digressive. Target groups comprised families in need, old people, the handicapped,
socially excluded long-term unemployed, etc. The types of social services which were
financed included meals on wheels, social canteens, day care centres, protected
workshops, temporary shelters, home aid support, juridical and medical assistance. The
social response measures of RICOP will build upon the valuable experience of the
SESAM Programme.

EU/Phare LIEN Programme
 The Phare multi-country LIEN Programme is designed to support institution building
and promote initiatives of non-governmental organizations in the field of social actions
designed to protect the disadvantaged categories of the population (women, children,
old people, roma, handicapped people, the unemployed, etc.)
Projects are submitted by NGOs and are based on a co-financing principle. Romania
has been an active participant in the Lien Programme since 1993.

EU/Phare Programme on Vocational Education and Training “VET” (RO 9405)
The objective of the VET programme (25 Meuro) , administered by the Ministry of
National Education, was to support the Ramanian Government to better prepare
students for work in a market economy by modernizing the curricula and the methods
used in vocational schools and through adapting the system to the best European
practice. More specifically, the programme assisted the reform of the VET system
through policy changes and the introduction of practical measures in a nationally-spread
and forward-oriented group of pilot and demonstration schools which pioneered change
throughout the system. The programme resulted in 75 modern VET schools, new
programmes for in-service teacher training, reformed curricula, assessment and
certification methods, modern learning and teaching materials. VET partnerships
developed at a local level and represented a revised VET policy for the future.
                                              51
                        Annex 4 – Reference to feasibility studies for project : RO0108.03

Some of the achievements of this programme are as follows:
  • curriculum development
    Curricula were developed for vocational schools, with a broad vocational base for
    the first two years and a more specialised modular provision in the last year. The
    curricula developed for post-high schools have a two-year flexible modular
    structure.
  • teacher training
    Student centred methods of teacher training were introduced and didactical
    material for independent learning was introduced
  • school management
    Management training based on a democratic leadership style, focusing on a whole
    school approach in adopting innovation, as well as creating a sustainable learning
    environment
  • partnership with the community
    Structural partnerships with various stakeholders in the community were
    developed, aiming at: making vocational education more relevant to its users and
    facilitating the entry of graduates into the labour market
  • equipment2
    Occupational learning equipment was provided to VET schools, to facilitate
    implementation of the newly developed curricula. It should be mentioned that
    some studies indicate that the equipment was not adequate enough for the
    specialised curriculum of the final year of the vocational schools.
  • evaluation and certification
    A system of evaluation including the active involvement of the social partners was
    put in place and a certification system based on the assessment of competence
    through final examinations was introduced.

Phare projects related to quality assurance - TTQM Phare RO 9602-05 project
TTQM Phare RO 9602-05 project for development of education for quality with the
purpose of creating curricula for compulsory and post-compulsory education; the project
has been developed in co-operation with the National Agency for Science and
Technology Innovation and conceived of profile of an effective consumer or producer of
qualitative goods or services. The educational component consisted of specific curricula
developed for several levels of education and specialised VET structures.

ETF Parallel funded project for human resource development at local and
regional level
The project supported two activities in the Southeast region, one on the development of
strategies for human resource development at county level and the other on the
establishment of school consortia or school networks for the delivery of continuing
vocational training.

Education for a Second Chance
The objective of this programme is to assist young people who abandoned compulsory education,
to re-enter education and to get at the same time a pre-qualification that will help them either to
find work in the local community or formally access other professional routes within VET.

Reform of Pre-university Education co-financed by the World Bank and the
Romanian Government (RPE) 1995 - 2001

2
    Further information re equipment is supplied in Annex 1
                                                     52
                   Annex 4 – Reference to feasibility studies for project : RO0108.03
The WB programme Reform of Pre-university Education complemented the Phare VET
RO 9405 programme through its component RPE. The component focused on activities,
which are equally important for general education as well as for VET.

Community Programme Leonardo da Vinci
This Community Programme, opened up to Romania in 1997, and aims to : promote
transnational co-operation and partnerships between training establishments and
industry in the field of vocational training; improve employability of workers, especially of
those disadvantaged the labour market, through vocational training, career counseling
and lifelong learning; promote language skills, dissemination of information, open and
distance learning; ease these transition of young people to working life, etc. Romania
participated successfully in the last three calls for proposal organized within the
framework of the Leonardo Programme.

EU/Phare Energy Programme (RO 9504)
The programme, managed by the Ministry of Industry and Trade, has financed a project
of active response measures (850 KEuro) to cope with the distress caused by the
restructuring of coal mining industry and massive redundancies in Gorj county and Jiu
Valley. Following competitive procedure, around 20 grants (20.000-80.000 Euro) were
provided to local entreprises for job creating projects in the two regions. It is estimated
that 800 new jobs will be created. The implementation will last one year and finish by
December 1999. The Energy programme has also financed regional development
studies for both areas mentioned above, and may inspire the overall trend of the future
development of the regions as well as government and other donors’ support. The
finance component of RICOP may usefully use the model of implementation
arrangements of the Energy programme.

Catch-up Mining Fund Programme (MARR)
Given the size of the problem and the high absorption capacity of funds in the Energy
Programme (detailed above) the Commission has approved in the 1998 a further
allocation of 10 Meuro from the ‘Catch-up Facility’ for the establishment of a Fund
designed to further alleviate the social costs of coal mining restructuring in Gorj county
and Jiu Valley. 6 Meuro of the total allocation will finance local partnership projects for
active employment measures, small infrastructure, environment protection, social
investment, welfare services, vocational education and training, community projects,
public work, etc. The remainder of 4 Meuro will be used for the provision of credits to
local SMEs.Implementation will last until December 2001.

EU/Phare SMEs Support (1992, 1994, 1997 Phare allocations)
The first phase of Phare support to the SME sector in Romania commenced in 1993
with an allocation of 10 Meuro. It consisted of four main inter- related components:

1.Support to the establishment of the SME agency (CRIMM) and five locally-based
SME development centers. Technical assistance and seed finance has been provided
to the centres, established as locally-based foundations, with members ranging from the
local administration to chambers of commerce and private entrepreneurs. Each center
provides basic advice and information to entrepreneurs and acts as a focal point for
SME development in the area. The centres are self-sustainable. All five centres
commenced operation in April 1994.

2.Development of a favorable atmosphere for SMEs. There has been a programme of
support to SME associations in developing their structures. This programme has moved

                                             53
                  Annex 4 – Reference to feasibility studies for project : RO0108.03
relatively slowly due to the fragmentary nature of the associations and the need to
clarify which bodies were truly representative and had identified projects for support.
Reform of the education system is also important, a project has been supported to
introduce entrepreneurship into the way in which subjects are taught in secondary
schools. Support for policy making has taken the form of support for the establishment
of an Office of Advocacy which produced a White Paper, in July 1995, outlining the
main obstacles existing at the different levels, to the development of the SMEs sector in
Romania. Support to international business relations development has been provided
through a special grant scheme developed in order to allow all business advisory
centers to become promoters of local economic development initiatives.

3. Setting up of pilot Business Innovation Centers (BICs). The basic objective of this
project was to stimulate entrepreneurship and encourage the introduction of innovative
processes into existing SMEs with growth potential and which can directly contribute to
economic development and job creation. Four Business Innovation Centres (BICs),
using EU models, have been established since September 1995. Phare provided
technical assistance for the setting up of the centres, accommodation and capital for
incubated companies, and seed money for the start-up and supply of the equipment.
Funding was digressive, BICs were able to be self sustainable in the third year of
operation.

4.Seting up of a 3,4 Meuro grants scheme for SMEs. A conditional micro- grant scheme
for assisting SMEs to purchase equipment and other assets directly related to their
activity has been operational since December 1993. The maximum individual grant
which could be given to an entreprise was 50,000 Euro. Beneficiaries were registered
private enterprises with up to 50 employees maximum capital of 0,5 Meuro and turnover
of 1 Meuro. Applications for obtaining a conditional grant, supported by adequate
documentation proving the reliability of the applicant company, were submitted to one of
the Business Advisory Centres, which assisted the company in developing a business
plan. After appraisal of the projects, the grant decision was taken by a Steering
Committee, composed of members of financial institutions and the CRIMM Foundation.
The recipient SME contributed at least 50% of the total cost of the machinary procured.
Around 240 enterprises have received financial assistance since early 1996 and around
2400 new jobs have been created.

The second phase supported SMEs and regional development in an integrated manner,
given that experience in both EU and CEECs shows the strong interdependence
between the two sectors. The programme had different components, support for
regional policy analysis and development of SMEs policy; information, training, and
support to advisory centres activities, to raise awareness and skills of SME and local
development initiatives; allocation of resources for the establishment of a Local
Development Initiatives Fund (FIDEL) and SME financial pilot schemes.

At the local level, the objective was to provide financial services to the business
community, advisory centres and local development actors. A Resource Centre to
support local development and SMEs was established in order to improve circulation
and exchange of experience. More than 40 training courses were delivered to the main
target groups covering issues related to local/regional development and project
management, followed by courses in consultancy skills for the 84 SME development
centres and business incubators set up by various donors in Romania. In addition, 6
Meuro was earmarked for a pilot credit scheme to improve SMEs access to commercial
finance and encourage banks to provide loans to SMEs.

                                           54
                   Annex 4 – Reference to feasibility studies for project : RO0108.03

The FIDEL project provided small grants to support local development initiatives in
particular to strengthen basic and promising structures (existing and new support
institutions, start-up of production oriented services) of the emerging SME sector. The
programme was based on the concept of local partnership. Applicants were local
consortia comprising typically, local authorities, prefecture, SME associations, Chamber
of Commerce, trade unions, universities, etc. The three calls for proposal resulted in the
submission of about 450 project proposal and the selection of 64 projects for financing.
The contracts were signed in December 1997 the implementation completed in
December 1998. Typical projects included: support for SMEs expansion; setting-up of
new support service centres for SMEs; development of services in the field of
agriculture, agro-industry, quality control, technological transfer and export promotion
activities. The finance component of RICOP will benefit from the experience of FIDEL.

At the national level, the programme provided training and technical assistance to the
National Agency for Privatization. The aim was to assist the Romanian authorities to
create an enabling environment (fiscal incentives, financial instruments, etc) for the
development of the SMEs sector. A separate objective aimed at enhancing the dialogue
and the debate between the Government and the private sector on how to promote
SMEs development.

The third phase of the Phare support (5,75 Meuro) for SMEs commenced in 1997. It
will provide investment credits to enterprises through commercial banks, which in turn
will strengthen banking services for SMEs. Banks were selected and the implementation
of the programme is expected to start soon.

Technical Assistance related to SME issues available under the Phare Programmes in
1992, 1994, 1997, 1997, 1998, and 2000.

Technical assistance within the first Phare support programme has been provided to
establish CRIMM Foundation and five locally based SME development centres, for the
setting up of business innovation centres. The support for policy making capacity has
taken the form od support for the establishment of an Office of Advocacy which produced
a White Paper in July 1995.

The component ‘Support for regional policy analysis and development and SME policy
support to the national Agency for Privatisation’ of the Phare Programme RO 9408
provided training and technical assistance to help the Romanian authorities to develop
more appropriate policies for the SME sector. The focus of the activities undertaken was
on measures to improve the fiscal, legislative and regulatory frameworks (the “enterprise
environment”).

The Phare Programme ‘Enabling Environment for Enterprises and Investment’ RO 9706
was intended to develop the ability of the National Agency for Small and Medium
Enterprises (NASME) to contribute to building an enabling environment for enterprise and
investment, with a specific focus on the main obstacles presently faced by SMEs.
Technical assistance was offered to enhance the capacity of the NASME in four main
areas:
- Formulating SME support programmes in line with EU good practice and relevant
   EC policy guidelines;
- Designing and implementing systems for monitoring the impact of SME support
   programmes and measures;

                                            55
                    Annex 4 – Reference to feasibility studies for project : RO0108.03
-   Collecting, updating and disseminating relevant knowledge on the business
    environment of the SME sector in Romania;
-   Monitoring and assessing emerging legislation with an impact on enterprise and
    investment.

The Technical Assistance for Small SME Credit Scheme RO 9711.02 was intended to
contribute to effective management of the SME credit scheme launched in 1997 by Phare
in order to improve access by micro, small and medium enterprises (SMEs) to loan
financing. The project is intended to provide all implementing parties with technical
assistance for effective implementation according to Phare guidelines, and with clear
sustainability perspectives.

The Technical Assistance component of the MARR Fund – SME Credits RO 9809.02.02
provides assistance to design the scheme, select the implementing banks, negotiate the
funding agreement with the selected financial institution(s), finalise the operations
manual, train a number of credit officers, monitor progress with the scheme, establish
evaluation procedures, elaborate statistics, assess the scheme’s overall results and
impact.

The project Technical Assistance for the preparation of the SMEs Credit Line under
Phare 2000 - RO9807.01.02.12 has as main objective to prepare the detailed design of
the SME credit line, to select the Romanian bank(s) which will implement the Credit Lines
in the four target regions and to make the whole system functional, so that the objectives
of the SME Credit Line, which will be financed under Phare 2000, can be fully and timely
achieved.

EU/Phare Human Resources Development Programme (RO 9701.01)
The objective of this programme, supervised by the Development for European
Integration and steered by an interministerial Task Force, is twofold: to support
Romanian enterprises in upgrading the managerial and technical skills of their stuff,
thus strengthening their competitivity in the market; and to improve the enterprise
training industry in Romania. The programme also aims to develop recommendations
for policy makers in stimulating enterprises to invest in the development of their human
resources. The successful applicants will receive grants on a co-financing basis. The
implementation of the programme, with a budget of 3 Meuro, will last until end 2000.

EU/Phare Regional Policy and Cohesion Programme (RO 9807.01)
The objective of the programme is to support the establishment of a comprehensive
framework for regional development, incorporating policy, and legislation instruments,
together with the administrative capacity to manage ISPA, SAPARD and Phare in an
Objective 1 context. The programme has a budget of 33 Meuro to support actions
related to industrial restructuring of areas blighted by the decline of traditional industries,
including: human resource development to support integrated development of
designated regions, project preparation for ISPA, environment and transport
infrastructure, rural development, technical assistance, etc. The main supervisory role of
programme implementation belongs to the National Agency for Regional Development.
To co-ordinate and consider issues related to actions falling under all components of the
programme, a Monitoring Committee composed of relevant Romanian authorities and
Commission’s services was established. The programme implementation will last until
December 2001.
•
Under Phare RO98.07.01 - ISPA Preparation Facilities assistance provided for physical
            infrastructure is for the following components:
                                              56
                    Annex 4 – Reference to feasibility studies for project : RO0108.03
-   Environmental measures enabling Romania to comply with the requirements of
    Community environmental law with the objectives of the Accession Partnership;
-   Transport infrastructure measures which promote sustainable mobility and in
    particular those that constitute projects of common interest based on the criteria of
    Council Decision 1692/1996 and those that enable the beneficiary countries to
    comply with the objectives of the Accession Partnerships; this includes
    interconnection and inter-operability of national networks as well as with the Trans-
    European networks together with access to such networks.

For the above-mentioned measures, trough Phare 1998 are going to be implemented the
             following technical assistance projects:
-   TA to the ISPA co-ordination unit within the Ministry of Transport;
-   TA for Ministry of Transport for ISPA-Roads Projects - Motorway By-Passes
    Feasibility Study and Design;
-   TA for Ministry of Transport for ISPA - Roads Projects - Review of Feasibility Study
    and Preparation of Detailed Design for the project " Bucharest- Giurgiu
    Expressway";
-   TA for Ministry of Transport for ISPA - Railway Projects, Preparation of detailed for
    the project " Rehabilitation of the Railway line Bucharest, section Baneasa-
    Fundulea";
-   TA for the ISPA co-ordination unit within the Ministry of Environment;
-   Rehabilitation and Modernization of the Water Supply and Sewerage Systems for
    Area of Cluj;
-   Upgrading the Water and wastewater System in Iasi in order to comply with
    International Standards for Water Quality and Environmental Protection;
-   Rehabilitation of Wastewater Treatment Technology Drinking Water Supply and
    Sewerage Improvement for the population of Timisoara City;
-   TA for the National Co-ordination of ISPA projects;

For business infrastructure under Regional Policy and Cohesion Programme - Industrial
Restructuring and Human Resources Component was identified and in course of
assessment a number of projects, in each of 4 target regions, aimed on services related
to business and networks of specific information and communication issues.

The projects under Development of Regional and Local infrastructure must be connected with the
projects under the other two components of Regional Development programme Phare 2000,
Regional SMEs Development Support and Twinning on regional planning and programme
development. This approach can permit a better concentration of funds on the projects with great
potential of development and great estimated regional impact avoiding the spreading of funds on
too particularly needs. This approach must be a priority in the identification of the regional
development projects being a very good exercise preparing the RDAs for the management of the
European Regional Development Fund.

EU/Phare Disaster Damage Reconstruction Programme
The programme has assisted the Romanian Government in coping with the damage
caused by the floods, which occurred in 1997 and 1998. It has been supervised by the
Ministry of Finance and implemented by Municipalities. The implementation
mechanisms allowed a very rapid disbursement rate, while assessment to date
indicates a positive impact on beneficiary regions. The public works component of
RICOP will build upon this positive experience.

EU/Phare Enterprise Restructuring and Employment Conversion Programme
(RICOP) – RO9904 - starting with 2000 has the overall objective to assist the

                                              57
                      Annex 4 – Reference to feasibility studies for project : RO0108.03
Government in moving towards fulfilling EU membership criteria in the area of economic
policy.

The immediate objectives are:
• To assist the government to implement policies and actions to restructure, privatise
   or close loss making enterprises;
• To alleviate the consequence of enterprise closure through a strengthened social
   safety net and through the promotion of employment initiatives;
• To encourage economic activity leading to sustainable employment creation through
   assistance to Small and Medium Enterprises and micro businesses.

•      There are five main components to the programme: Redundancy intervention, Public works,
    Employment promotion initiatives, Small business finance and Social response measures.
    Taken together they represent an integrated approach to enterprise restructuring and
    employment conversion. The “Measures to diminish the social impact of industrial
    restructuring" component (Total budget 10 Meuro) aims at offering an adequate social support
    and employment opportunities in the areas most affected by the industrial restructuring. It is
    intended to develop 50 social centers, 20 emergency reintegration centers, 17500 benefici-
    aries of social      services, 1300 new jobs, out of which at least 900 for the unemployed.


Other Donors’ Support:.

World Bank Redeployment Programme
The programme, launched in 1997, is managed by the National Agency for employment and
      Training and is co-financed by the World Bank with a loan of 10 million USD. It is specially
      targeted to regions where massive redundancies take place. The programme supports pre
      and post lay-offs measures, for instance: outplacement services, business incubators,
      public works, vocational training, information and mediation activities, etc. The programme
      design has been built on the successful experience of the EU/Phare PAEM programme
      and will last until the end of 1999.

Social Development Fund
The project aims to contribute to poverty alleviation and to community-driven development
       through:
a) improving the livelihood of project beneficiaries in poor rural communities and
    disadvantaged groups; and
b) increasing the local level organizational and self-help capacity.
It will support small scale local infrastructure, community-based social services, income
generating activities and development of employment opportunities. It is estimated that
1,200 local projects, developed in partnership and co-financed by local contributions,
will be supported and around 600,000 persons will benefit. The Social Development
Fund is co-financed by the World Bank with a loan of 20 million USD, with matching
Romanian Government funds totaling 5 million USD. The project is under preparatory
phase.

The World Bank Programme - "Employment and Social Protection Project"        (Total
budget 95.2 M$) aimed at reforming the social insurance and assistance system so as to
target assistance to the most vulnerable to poverty.

Micro credit schemes financed by the World Bank, USAID, Soros Foundation, Swiss
Cooperation

SME Credit Schemes financed by bilateral and multilateral institutions
                                                 58
                    Annex 4 – Reference to feasibility studies for project : RO0108.03

BANC POST GRANTS NEW CREDITS FOR TOURISM
Tourism will benefit from new credits of over 33 billion lei granted by Banc Post. Investment
projects for building, developing, modernizing tourist structures of any kind, investments for
increasing the quality of tourist services receive financing in advantageous conditions. ANT
covers 50% of the interest rate from the Special Fund for the Development and Promotion of
Tourism. The credit beneficiaries benefit from two billion lei at the most for investments. The
credit is payable in 3 years with a period of grace of 6-12 months. (SOP)




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                                                                      Annex 4 – Reference to feasibility studies for project : RO0108.03

       Annex 4.2. Definition of priority areas
                                       AREAS' DENOMINATION AND SELECTED CHARACTERISTICS

                                                                              The Region        Urban         % in        Localities
Area              Denomination of the Areas undergoing industrial            to which the    inhabitants   Romania’s    belonging to
                                     restructuring                             selected       -number-     population      the area
                                                                            Areas belong                                  -number-
I           Industrial Area " North-East Moldova"                           NORTH-EAST      471.033        2,1          12
II          Complex Industrial Area " Central-West Moldova "                NORTH-EAST      598.908        2,7          12
III         Industrial Area "Curvure Sub-Carpathians "                      SOUTH-EAST      463.182        2,1          9
                                                                            NORTH-EAST
IV                                                                          SOUTH-EAST      672.248        3,0          5
            Industrial and Services Area "Inferior Danube"
V           Industrial and Mining Area " Muntenia Sub-Carpathians "         SOUTH           503.407        2,2          13
VI          Industrial Area "Central Oltenia "                              SOUTH-          542.631        2,4          10
                                                                            WEST
VII         Industrial Area “Mehedinti Plateau "                            SOUTH-          309.609        1,4          11
                                                                            WEST
VIII        Old Industry Area "South Banat" and “Petrosani Basin”           WEST            589.788        2,6          22
IX          Mining and Quarrying Area "Apuseni Mountains"                   CENTRE,         350.826        1,6          17
                                                                            NORTH-
                                                                            WEST
X           Mining and Quarrying Area " Maramureş" and                      NORTH-          487.050        2,2          15
            Light Industry Area “North Transilvania”                        WEST
XI          The Complex Industrial Area " Central Transylvania "            CENTRE          773.969        3,4          21

       The Areas’ urban inhabitants - total number-                                            5.762.651         25,7

       The urban localities belonging to the areas -total number-                                                           147




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                    I Industrial Area "North-East Moldova"




                                              Urban
Item Urban localities                      inhabitants     Judets (counties)
                                            -number-
 1                Botoşani                       127.125       Botoşani
 2                Suceava                        118.011       Suceava
 3                Paşcani                         45.863         Iaşi
 4                Dorohoi                         35.177       Botoşani
 5                Fălticeni                       33.673       Suceava
 6                Rădăuţi                         32.086       Suceava
 7               Tg. Neamţ                        22.474        Neamţ
 8               Tg. Frumos                       13.560         Iaşi
 9                 Hârlău                         12.171         Iaşi
 10               Dărăbani                        12.052       Botoşani
 11                 Siret                         10.138       Suceava
 12                Săveni                          8.703       Botoşani




         The Area’s urban inhabitants - total number-                     471.033

                  % in Romanian’s population                                   2,1




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             II Complex Industrial Area "Central-West Moldova"




                                          Urban
Item Urban localities                  inhabitants          Judets (counties)
                                        -number-
 1               Bacău                           209.121         Bacău
 2           Piatra Neamţ                        124.607         Neamţ
 3              Roman                              81.518        Neamţ
 4               Oneşti                            60.234        Bacău
 5            Comăneşti                            26.367        Bacău
 6             Moineşti                            25.402        Bacău
 7              Buhuşi                             21.939        Bacău
 8            Dărmăneşti                           14.283        Bacău
 9            Tîrgu Ocna                           14.158        Bacău
 10              Bicaz                              9.018        Neamţ
 11            Săvineşti                            6.899        Neamţ
 12         Slănic Moldova                          5.362        Bacău



        The Area’s urban inhabitants - total number-                     598.908

                 % in Romanian’s population                                  2,7




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                 III Industrial Area "Curvature Sub-Carpathians"




                                            Urban
Item Urban localities                    inhabitants        Judets (counties)
                                          -number-
 1                Buzău                           147.007         Buzău
 2               Focşani                           98.119        Vrancea
 3               Bârlad                            78.156          Vaslui
 4              Tecuci                             46.586         Galaţi
 5           Râmnicu Sărat                         41.911         Buzău
 6              Adjud                              20.598        Vrancea
 7             Mărăşeşti                           13.081        Vrancea
 8              Panciu                              9.637        Vrancea
 9             Odobeşti                             8.087        Vrancea



        The Area’s urban inhabitants - total number-
                                                                            463.182
                % in Romanian’s population                                      2,1




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                IV Industrial and Services Area "Inferior Danube"



                                                Urban
Item Urban localities                        inhabitants       Judets (counties)
                                              -number-
 1                Galaţi                              327.609       Galaţi
 2                Brăila                              231.974       Brăila
 3                Tulcea                               95.231       Tulcea
 4                Măcin                                11.749       Tulcea
 5               Isaccea                                 5.685      Tulcea




          The Area’s urban inhabitants - total number-
                                                                        672.248
                  % in Romanian’s population                                 3,0




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           V Industrial and Mining Area "Muntenia Sub-Carpathians "



                                                Urban
Item Urban localities                        inhabitants       Judets (counties)
                                              -number-
 1                  Piteşti                           187.107       Argeş
 2               Tîrgovişte                            98.330     Dîmboviţa
 3          Cîmpulung Muscel                           43.295       Argeş
 4                Mioveni                              36.293       Argeş
 5           Curtea de Argeş                           34.282       Argeş
 6                 Moreni                              22.872     Dîmboviţa
 7                 Găeşti                              16.525     Dîmboviţa
 8               Pucioasa                              16.369     Dîmboviţa
 9                Costesti                             12.081       Argerş
 10                  Titu                              10.629     Dîmboviţa
 11             Topoloveni                             10.306       Argeş
 12                 Fieni                                8.111    Dîmboviţa
 13         Mija (I.L.Caragiale)                         7.207    Dîmboviţa

          The Area’s urban inhabitants - total number-                    503.407
                   % in Romanian’s population                                 2,2




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                        VI Industrial Area "Central Oltenia"




                                                 Urban
Item Urban localities                         inhabitants       Judets (counties)
                                               -number-
 1                 Craiova                            314.114         Dolj
 2                 Slatina                             86.598         Olt
 3                 Caracal                             38.905         Olt
 4                   Balş                              22.946         Olt
 5                Drăgăşani                            22.470        Vîlcea
 6                  Filiaşi                            20.215         Dolj
 7               Scorniceşti                           13.650         Olt
 8              Drăgăneşti Olt                         13.070         Olt
 9    Piatra Olt                                        6.620         Olt
 10                Işalniţa                             4.043         Dolj



           The Area’s urban inhabitants - total number-
                                                                              542.631
                   % in Romanian’s population                                     2,4




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                        VII Industrial Area “Mehedinti Plateau"




                                                  Urban
Item Urban localities                          inhabitants
                                                -number-         Judets (counties)
 1          Drobeta-Turnu Severin                       117.268      Mehedinţi
 2                 Tg. Jiu                               97.667         Gorj
 3                  Motru                                25.536         Gorj
 4                 Orşova                                15.168      Mehedinţi
 5                Rovinari                               12.920         Gorj
 6              Bumbeşti-Jiu                             11.807         Gorj
 7             Tg. Cărbuneşti                              9.158        Gorj
 8                 Novaci                                  6.152        Gorj
 9             Baia de Aramă                               5.774     Mehedinţi
 10                Ţicleni                                 5.155        Gorj
 11                Topleţ                                  3.004 Caraş-Severin


           The Area’s urban inhabitants - total number-
                                                                           309.609
                    % in Romanian’s population                                 1,4




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         VIII Industrial Area "South Banat" and “Coal Basin Petrosani”



                                                  Urban
Item Urban localities                          inhabitants          Judets (counties)
                                                -number-
 1                      Reşiţa                             93.253    Caraş-Severin
 2                Hunedoara                                79.235     Hunedoara
 3                   Deva                                  75.918     Hunedoara
 4                 Petroşani                               50.452     Hunedoara
 5                  Vulcan                                 32.718     Hunedoara
 6                  Lupeni                                 31.053     Hunedoara
 7                Caransebeş                               30.923    Caraş-Severin
 8                   Petrila                               28.371     Hunedoara
 9                  Orăştie                                24.159     Hunedoara
 10                  Bocşa                                 18.929    Caraş-Severin
 11                   Brad                                 17.816     Hunedoara
 12                 Oraviţa                                15.053    Caraş-Severin
 13                  Călan                                 14.542     Hunedoara
 14                 Simeria                                14.532     Hunedoara
 15               Oţelu Roşu                               13.005    Caraş-Severin
 16                  Haţeg                                 12.509     Hunedoara
 17                 Uricani                                12.006     Hunedoara
 18                  Anina                                 10.535    Caraş-Severin
 19                Aninoasa                                 6.110     Hunedoara
 20                 Nădrag                                  3.538        Timiş
 21                 Tomeşti                                 2.745        Timiş
 22                Margina                                  2.386        Timiş


            The Area’s urban inhabitants - total number-                      589.788

                    % in Romanian’s population                                       2,6




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          IX Mining and Quarrying Industry Area "Apuseni Mountains"


                                            Urban
Item Urban localities                    inhabitants     Judets (counties)
                                          -number-
 1              Alba Iulia                        71.995       Alba
 2               Turda                            60.538       Cluj
 3                Cugir                           30.077       Alba
 4            Cîmpia Turzii                       29.708       Cluj
 5               Sebeş                            29.474       Alba
 6                Aiud                             28.676        Alba
 7                 Blaj                            21.436        Alba
 8            Ocna Mureş                           15.610        Alba
 9                Beiuş                            11.771        Bihor
 10                Ştei                             9.192        Bihor
 11              Zlatna                             9.154        Alba
 12             Câmpeni                             8.511        Alba
 13               Teiuş                             7.279        Alba
 14              Abrud                              6.596        Alba
 15           Baia de Arieş                         4.885        Alba
 16             Vaşcău                              3.049        Bihor
 17              Nucet                              2.875        Bihor



          The Area’s urban inhabitants - total number-                   350.826

                  % in Romanian’s population                                 1,6




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            X Extractive Industry of Maramureş and the predominant
                     Light Industry Area of North Transilvania




                                             Urban
Item Urban localities                     inhabitants         Judets (counties)
                                           -number-
 1              Baia-Mare                          150.506       Maramureş
 2               Bistriţa                           86.845     Bistriţa-Năsăud
 3          Sighetul Marmaţiei                      44.170       Maramureş
 4                 Dej                              40.888            Cluj
 5                Borşa                             27.279       Maramureş
 6               Gherla                             24.107            Cluj
 7            Vişeul de Sus                         18.304       Maramureş
 8             Negreşti Oaş                         16.292       Satu-Mare
 9              Baia Sprie                          15.869       Maramureş
 10             Tg. Lăpuş                           14.008       Maramureş
 11              Beclean                            11.865     Bistriţa-Năsăud
 12              Năsăud                             11.332     Bistriţa-Năsăud
 13           Sângeorz Băi                          10.669     Bistriţa-Năsăud
 14               Seini                               9.432      Maramureş
 15              Cavnic                               5.484      Maramureş



          The Area’s urban inhabitants - total number-                    487.050
                  % in Romanian’s population                                     2,2




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              XI The Complex Industrial Area “Central Transilvania”


                                                  Urban
Item Urban localities                          inhabitants     Judets (counties)
                                                -number-
 1                 Braşov                              311.059      Braşov
 2                 Mediaş                               62.379       Sibiu
 3             Miercurea Ciuc                           46.493     Harghita
 4                Făgăraş                               44.318      Braşov
 5           Odorheiu Secuiesc                          39.577     Harghita
 6               Sighişoara                             36.045      Mureş
 7                 Săcele                               30.094      Braşov
 8                Tîrnăveni                             29.830      Mureş
 9                Zărneşti                              26.632      Braşov
 10                Codlea                               24.796      Braşov
 11                Luduş                                18.641      Mureş
 12                Râşnov                               16.218      Braşov
 13                  Avrig                              16.181       Sibiu
 14               Covasna                               12.303     Covasna
 15                Agnita                               12.119       Sibiu
 16          Cristuru Secuiesc                          11.155     Harghita
 17                Victoria                             10.832      Braşov
 18                Baraolt                              10.444     Covasna
 19                 Iernut                               9.835      Mureş
 20          Întorsura Buzăului                          9.100     Covasna
 21             Dumbrăveni                               8.803       Sibiu
 22                Vlăhiţa                               7.414     Harghita
 23                Rupea                                 6.323      Braşov
 24             Copşa Mică                               5.225       Sibiu


           The Area’s urban inhabitants - total number-                   805.816

                   % in Romanian’s population                                 3,6




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Annex 4.3. SWOT analysis of priority areas

                                             I. Industrial Area “North – East Moldova”

                                                         SWOT Analysis


 Strengths                                                      Weaknesses

    • Located along the road and railway corridors Siret-            •   Lack of some important natural resources
      Suceava-Bucharest and towards the Republic of
                                                                     •   Enterprises with relatively low viability, with reduced
      Moldova; the area is served by Suceava and Iaşi                    capacity to adjust to competition demands of the market
      airports                                                           economy

    • Relatively new productive enterprises (established             •   High level of community poverty indicators
      after 1970) in industrial sectors, such as wood
      processing, furniture, textile, mechanical engineering,        •   High need for workforce to get qualification in different
                                                                         trades
      equipment and food industry
                                                                     •   Industrial decline which generated a high rate of
    • Employment qualification in trades specific to light               unemployment, constantly above the national average
      industry (leather, textile and manufactured industry)
      constructions and wood processing                              •   Numerous half-urban centers, insufficiently endowed with
                                                                         urban utility networks and with predominantly rural -type
                                                                         economies
    • Population with a non demanding nature and capacity
      to adapt easily to hard working conditions                     •   Relatively unfavorable image outside the area and very
                                                                         reduced mobility of the population
    • University centres in Suceava and Iaşi (near the area)
                                                                     •   Over the last decade the number of industrial employees
    • No problems with pollution                                         reduced by half (Dărăbani, Rădăuţi, Săveni, Botoşani,
                                                                         Fălticeni,Paşcani, Tg. Nemţ)

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Weaknesses –continued -


     •   The most important industrial decline appeared in large
         urban centers (Suceava, Botoşani, Dorohoi)

     •   Mono-industrial centers (e.g. Saveni-textile), severely
         affected by economic decline

     •   Limited production and trading relations with the rest of
         the country and with foreign markets

     •   Deforestation process contributed to major landslides




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Opportunities                                                    Threats


  •   Tradition in handicrafts – pottery, wood manufacturing,         •   Some industrial enterprises are facing          closure
      handicraft fabrics                                                  programmes or bankruptcy procedures

  •   Potential for the development of services (transport,           •   Important migration of people with high level of
      storage, distribution) for South Ukraine and Republic of            qualification
      Moldova
                                                                      •   Low level of participation in the restructuring process
  •   Unpolluted areas with high potential for collecting and             could lead to the increased discrepancy between this
      processing medicinal plants                                         area and the rest of the country

  •   Several enterprises in various industrial are currently
      undergoing restructuring and other 4 are included in
      privatisation programmes

  •   The tourism sector (Suceava, Radăuţi, etc) and its
      development could boost the handicrafts, food industry
      and diversified services




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                                      II. Complex Industrial Area “Central – West Moldova”

                                                          SWOT Analysis


Strengths                                                          Weaknesses

   • The area is located along the road and railway corridor            •   Industrial restructuring and the loss of traditional markets
                                                                            hit strongly the chemical, petrochemical, mechanical
     Siret-Suceava-Bucharest,     with    favorable     land
                                                                            engineering, wood processing and textile sectors
     connections
                                                                        •   Restructuring and reconversion of military industry
   • Hydrocarbon, wood, salt and hydroenergy resources                      generate high social problems

   • Diversified industrial infrastructure, with a real capacity        •   The existence of some mono-industrial centers (Buhusi,
                                                                            Oneşti), where community life is severely affected by the
     in making new competitive products, if benefiting from
                                                                            economy crisis
     quality management
                                                                        •   Floods on Trotuş and Siret rivers and lack of related
   • Large urban network, where the main centers are                        protection works led important damages
     Bacau (200000 inhab) and Tg. Neamt (125000 inhab.)
                                                                        •   Significant decrease in the numbers employed in the
                                                                            industrial sector (towns such as Roman, Buhusi and
   • University centers in Bacău and neighbouring Iasi and
                                                                            Comăneşti have lost over 50% of employment)
     Galaţi, the area possesses a large and diversified
     educational network

   • High qualified workforce in fine mechanics, wood
     processing, textiles, chemical and petrochemical
     sectors

   • Enterprises with high level of technology (e.g. aircraft

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      enterprise from Bacau)



Opportunities                                                     Threats


  •   Adequate conditions for development of chemical and              •   Important migration of high qualified labour force
      petrochemical industry and wood processing sector
                                                                       •   Closure of unprofitable enterprises
  •   Many enterprises from different fields are included in
      restructuring and privatisation programmes                       •   Many enterprises faced with bankruptcy procedures

  •   Great potential for modernizing infrastructure and urban         •   Risk for further floods if deforestation continues
      services modernization

  •   Some sectors are still searching for markets, for their
      competitive products (synthetic fibres, mineral oils,
      furniture and textile products)

  •   Facilities accorded to investors by declaring the subzone
      Comanesti-Darmanesti as “disadvantaged area”




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                                     III. Industrial Area “Curvature Sub – Carpathians”

                                                       SWOT Analysis


Strengths                                                    Weaknesses

   • The area is located along the European Transport             •   Insufficiently stabilized industrial structure, due to the
                                                                      industrialization process carried out in an area without
     Corridor which crosses the country from North to
                                                                      proletarian tradition
     South, with favorable transport connections to North,
     South and East; the area is served by Băneasa and            •   The industrial decline generates severe social
     Bucureşti-Otopeni airports                                       imbalances

   • The main industrial sectors are: textile-clothing,           •   Insufficient and non diversified qualification of the
     metallurgy, mechanical engineering, glass, cellulose,            workforce
                                                                  •   Massive deforestation at the end of the XiX th century
     food industry                                                    and the lack of protection works against landslides affect
                                                                      negatively the natural environment
   • Urban network, where the main center is Buzău
      (150000 inhab.)                                             •   The young people leave the area, due to lack of
                                                                      employment opportunities
   • All towns possess vocational and school centers

   • Low levels of pollution

   • Large numbers of people at their working age




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Opportunities                                                      Threats

  •   11 enterprises from metallurgy, textile, transport and            •   Industrial decline over the last decade generated, in
      food industries are included in restructuring programmes              some urban centers, the decrease by over 50% of
      and 21 enterprises from food and transport sectors are                employment
      included in privatisation programmes
                                                                        •   The existence of 15 industrial enterprises, each of them
  •   Some enterprises from food, textile and wood                          with more than 1000 employees, which by restructuring
      manufacturing industries could become profitable                      or closure processes, could generate a high level of
      through capital infusion and quality management                       unemployment (e.g. Buzău - 8 enterpr, Birlad - 3 enterpr

  •   Good conditions for the development of special steel              •   A permanent lack of investments for afforestation and
      industry, with high capacity to capitalise on domestic raw            consolidation works against landslides will lead to the
      materials and to enter on foreign markets                             decrease of the levels of acquifers

  •   Reduced pollution and the workforce surplus could
      create favourable conditions in setting up of small
      enterprises for collecting and processing medicinal
      plants and wild fruits (for external markets)

  •   Tourism potential: Muddy Volcanos and spa Monteoru
      near Buzau

  •   The existence of well known vineyards (Panciu,
      Odobeşti) could be a starting point in viticulture tourism
      development




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                                         IV. Industrial and Services Area “Inferior Danube”

                                                           SWOT Analysis


Strengths                                                         Weaknesses

   • Efficient road and rail connections (to North, East,               •   High concentration of large industrial enterprises (with
                                                                            over 1000 employees) each one, in Brăila and Galaţi ( 10
     South) and water links along the Danube river. Air
                                                                            each ), Tulcea (4)
     transport services are provided by Bucharest and,
     partially, Constanţa airports                                      •   The economic decline generates mass-unemployment,
                                                                            with low perspectives for comeback in the initial trades,
   • Traditionally, strongly specialized in trade and                       except clothing industry
     transports fields, the area was heavily industrialized:
     one of the biggest European siderurgycal complexes                 •   The creation of Danube - Black Sea Canal diminished
                                                                            the role played by Brăila and Galaţi as maritime harbours
     (Galati), primary processing of ores (Tulcea),                         for those Central and East European States not having
     mechanical engineering (Braila, Galati), clothing, wood                direct access to the sea (Hungary, Austria, ex
     processing and food industry                                           Tchekoslovakia). At the same time, the decrease in the
                                                                            economic activity of the Galaţi complex reduced the level
   • The main urban centers are Galaţi (aprox. 330000                       of activities run through the port facilities while the
                                                                            Yugoslavian crises paralised the transport activities
     inhab.) and Braila (aprox. 230000 inhab.), each one
                                                                            carried by the Romanian companies on the Danube,
     having an appropriate structure of its historical core                 which are using nowadays the Rotterdam and Hamburg
                                                                            ports
   • Diversified educational network, with university
     centers (Galaţi) and, in the proximity, Constanţa and
     Bucharest

   • In technical field particularly, there are a lot of different
     level qualifications                                          Weaknesses – continued -

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                                                                 •   The loss of ocean fishing fleet, a reduced to minimum of
                                                                     tourism activity in Danube Delta and the negative
                                                                     environmental impact of Ferom Tulcea company
                                                                     contributed to severe decline of economic activity
Strengths – continued -
                                                                 •   Lack of a bridge across the Danube is felt strongly not
• Some success stories in privatization and restructuring            only during winter time, but also reduces the
  process (Shipyard Damen, Braiconf clothing factory,                development potential of North Dobrogea zone
  Braila iron works factory) demonstrate the local
                                                                 •   Lack of concern and funds for dragging Sulina canal
  potential in surpassing the transition difficulties                decreases Danube harbours attractiveness




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Opportunities                                                    Threats

  •   Many enterprises are included in PSAL 1 programme               •   Restructuring process and bankruptcy procedures facing
      and SIDEX is to be privatised during 2001                           many enterprises could generate high social upheaval

  •   Free zones (Galati, Tulcea, Braila) generate important          •   The delay in organizing high - quality Danube Delta
      facilities for foreign and domestic investors                       tourism could generate the defacement of the last tourist
                                                                          objectives in the area; the large scale extension of
  •   Re-established river navigation will boost an important             poaching could prejudice the uniqueness of local fauna
      part of the economic activity of the area and could lead            and flora, therefore affecting the attractiveness for
      to transit trade development towards Central Europe for             hunting and ecological tourism
      high - quality building materials from Isaccea-Măcin
      area                                                            •   Low capacity for employment could lead to experts’
                                                                          migration, profession changing or their disqualification
  •   The North Dobrogea area, with low level of pollution and        .
      mild climate, could represent a good premise in
      developing collection and processing centres for
      medicinal plants




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                                 V. Industrial and Mining Area “Muntenia Sub-Carpathians”

                                                        SWOT Analysis


Strengths                                                       Weaknesses

   • Road and railway network, diversified in all directions,        •   Decline of the large industrial platforms (chemical, wood
                                                                         processing, mechanical engineering), including low
     served by Bucharest airports
                                                                         activity of recently privatized Dacia automotive company

   • Important natural resources (forests, waters) and               •   Some industrial sectors with low level of modernization
     mineral resources (oil, gas, coal, salt); well-known
     leisure and recreation areas                                    •   Large polluted areas, because of the obsolete oil
                                                                         exploitations
   • Highly diversified industry, with some modern
                                                                     •   Water pollution generated by an inadequate treatment
     subsectors (having potential for growth) and                        plants network
     competitive products (oil equipment, building material,
     electric equipment, household appliances, furniture,            •   Unsteady flow of surface waters and decreasing level of
     chemical industry, textiles)                                        ground-water layer (acquifers)

   • High level of urbanization, with diversified centers,           •   Important deforestation, generating landslides over the
                                                                         last years
     where the main ones are Pitesti (187000 inhab.) and
     Tîrgovişte (98000 inhab.); important gas supplying
     networks

   • Relatively developed banking and services network

   • Population with good tradition in industrial and

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      intensive agriculture activities and relatively high
      levels of education


Strengths – continued -

   • A dense and diversified educational network at all
     levels; universities in Piteşti and Tîrgovişte (the area is
     in the proximity of the important university center
     Bucharest)

   • Tradition in handicraft

   • The existence of a numbers of SMEs in trade and
     transport sectors

   • Relatively large number of joint venture enterprises




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Opportunities                                                     Threats

  •   Developed infrastructure could favour, with low costs, to        •   The decrease of oil production, caused by the exhausting
      setting up new enterprises                                           of the existing oil deposits

  •   The vicinity to Bucharest – where there is somehow a             •   Migration to Bucharest or Ploieşti of qualified young
      concentration of investments and, subsequently, a more               workforce
      expensive labour force – could increase its
      attractiveness as new investment location

  •   The increased importance of the area, such as
      permanent tourism and recreation zone (vacation
      houses) for people from Bucharest




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                                                   VI. Industrial area " Central Oltenia"

                                                              SWOT Analysis



Strengths                                                              Weaknesses
•   Area is located along the European transport corridor
    Timişoara – Bucharest and close to the future bridge over •             Relatively recently industrialized, the area didn't manage to
    Danube – from Calafat. It has favourable road and railway               structure its economic activity at an adequate level and
    connections and its air traffic is assured by Bucharest and             didn't diversified well enough the trades
    Craiova.
                                                                •           Except Craiova and Slatina cities, the urban centres don't
•   The area has a major role in country's energetical balance              demonstrate enough specific urban characteristics
    due to the existence of important resources of hydrocarbons
    and power production (thermo and hydro)                     •           The labour force is concentrated in 20 large industrial units,
                                                                            each of them with more than 1000 employees. The largest
•   The dominant industry is located in 2 cities: Craiova                   industrial concentration is in Craiova - 10 and Slatina - 6
    (railway and electric engines, aircraft, defence, thermo -              enterprises
    electric and chemical industry, food and textile industry) and
    Slatina (raw aluminum and aluminum products). The •                     Over the last 10 years the small mono - structured towns
    technology is partialy modernised and the products are                  with less structured economical activities have suffered from
    competitive                                                             the impact of industrial decline, resulting in a decrease by
                                                                            50% of employment (Balş, Filiaşi, Piatra Olt, Caracal,
•   Rich hydro-graphic basin; rehabilitation as well as the                 Dragăşani, and Scorniceşti)
    construction of new irrigation networks in the area would
    make possible the growth of agricultural products - raw
    material for food industry


Strengths – continued -
•   Important   area   for   cereal,   vegetable   and   viticulture


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    production
•   The diversified school network at all levels, including the
    University from Craiova it is a good premise to assure the
    qualification of the labour force in different jobs

•   A relative well developed services centres

•   Traditionally active population




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Opportunities                                                      Threats
•   The industrial enterprises in the area, such as rolling stock - •    In the restructuring/closure programmes are included 22
    Balş, railway wagons - Caracal, car pumps - Scorniceşti,             enterprises from mechanical engineering and chemical
    textile, food industry - Slatina, Dragăneşti Olt, supported by       industries, food industry, textile, and wood industries. In
    quality management, could regain internal and external               privatisation programmes are included 8 enterprises from
    markets. In the case of a competent privatisation, the               metallurgical, mechanical engineering and services
    Aluminum plant, the electric engine enterprise - Craiova
                                                                    •    Decrease of economical activities in mono-industrial towns
    and the aircraft enterprise,         these enterprises could
                                                                         like Caracal (railway wagons enterprise), Balş (rolling stock
    produce for export
                                                                         enterprise), Drăgăşani (rubber footwear enterprise), Calafat
•   There is a chance to re-open the big greenhouse complex,             (chemical enterprise) - has disturbed the life of those towns.
    near Craiova, which could specialise also in decorative              Filiaşi town has been also affected by the re-conversation of
    flowers, flowers and hothouse fruits or vegetables, at least         Romarm Plant (armament works) and it lost its role as
    for the south part of the country                                    industrial centre of the area

•   Agriculture and viticulture products could be a good premise •       The privatisation of large enterprises like Daewoo –
    for the development of canned vegetables industry and                Automobile Enterprise, Topway – Eadible oil enterprise and
    superior processing of wine (special cognac and vinegar)             Beer Factory from Craiova implied the decrease of
                                                                         employment, which has had social consequences.
•   The reconstruction process of the former Yugoslavia should
    be a good opportunity for the development of the existing •          The partial closure of chemical industrial platform Işalniţa
                                                                         (Craiova) mitigated the air pollution problems, but the
    construction materials sector from Craiova and Târgu Jiu
                                                                         existence of the coal-bearing sterile “mountain” near thermo-
•   Implementation of training and reconversion programmes               electric power station is a danger for soil pollution on large
    with EU financing is a good opportunity for unemployed               areas
    persons

•   The large enterprises "Romvag" (railway wagons) from
    Caracal, Electroputere (electrical and Diesel engines) and
    IUG (complex mechanical equipments) from Craiova are
    included in privatisation programme PSAL 1.




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                                          VII. Industrial Area “Mehedinti Plateau”

                                                       SWOT Analysis


Strengths                                                       Weaknesses

   • Drobeta Turnu-Severin and Orşova ports offer a                  •   Industrial activity and labour force are focused in 2 large
                                                                         industrial sub-zones. Most of industrial enterprises, with
     connection with the Danube water route, which units
                                                                         more than 1000 employees, are located in Tg. Jiu (6)
     the center of Europe with the Black Sea. The area has               and in Drobeta Turnu Severin (4) area; this important
     relatively developed West-East road and railway                     industrial area faces severe social problems during the
     connections, and is located along the transport                     restructuring process
     corridor Timişoara - Constanţa
                                                                     •   Mining activity involved a lot of people from the East of
   • Turntable for road connections with South Balcans                   the country who, while being affected by increased
                                                                         unemployment, do not have the support given by the
                                                                         retrocession of agricultural lands
   • Very important hydro-electrical energy production,
     hydrocarbons resources (oil and gas) and coal, as well          •   Except Turrnu Severin and Tg. Jiu towns, all the other
     as forests, mineral and thermal waters, building                    urban centers do not have, to a great extent, appropriate
     materials                                                           infrastructure

                                                                     •   Mehedinţi Plateau represents one of the poorest zones
   • Tourism potential: sub-Carpathian area of Oltenia
                                                                         of the country
     (Polovraci and Baia de Fier grottos), National Park
     Porţile de Fier, historical monuments (Tricule fortress,        •   Lowly diversified structure and low level of qualification of
     monasteries from Orşova, Tismana, Polovraci, Motru,                 labour force
     etc), Tg. Jiu (Brîncusi complex and narcissa glade)
                                                                     •   Inadequate condition of local road network
   • Large zones (Mehedinţi Plateau, Cernei Valley, Danube
     Canyon) with low pollution, limited agricultural

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activities, scarce population, Mediterranean flora with
precious species




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Opportunities                                                       Threats

   •   Legal declaration of three “disadvantaged areas”,                 •   13 enterprises in fields like: textile, food, mechanical
       covering more than 1200 sqkm: Motru-Rovinari (688),                   engineering      and     services   are    included   in
       Schela (308), Albeni (286) represents a good chance in                restructuring/liquidation programmes
       attracting investors due to incentives and facilities
       offered                                                           •   Mining and quarry area of the “Sub-Carpathian Oltenia”,
                                                                             the restructuring of mining and quarying activities and
   •   Owing to the increased capacity of the Nuclear Power                  dismissals through mines closure have created serious
       Plant from Cernavoda, The Heavy Water Plant near                      additional problems due mono industrial structure of the
       Drobeta Turnu Severin has chances in revigorating its                 area to the fact that in area there is one type of activity
       activity
                                                                         •   The reduction and then halt of the river traffic on the
   •   6 enterprises from ship building and mechanical                       Danube have affected the transport, repair and storage
       engineering industries are targeted for privatization                 activities in Drobeta Turnu Severin and Orşova ports

   •   Utilisation of redundant mining labour force to modernize         •   Road network rehabilitation and the consolidation of
       the local infrastructure (main road Băile Herculane - Baia            political situation in Yugoslavia (Serbia) could increase
       de Arama)                                                             goods and persons traffic

   •   The complex industrial centre Tirgu Jiu could offer               •   Escalated conflicts with compact Rroma communities (Tg
       chances for development of SMEs specialised in wood                   Jiu)
       processing and textile industries

   •   Good chances in participating to the reconstruction of
       countries emerged from former Yugoslavia

   •   Good potential in cross border co-operation
       development, due to strong relationships with ex -
       Yugoslavia


Opportunities – continued -

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•   Possibility to create services centres, related to the
    increase of road transport towards Asia through the new
    Calafat bridge

•   Good conditions in setting up collection and processing
    centres for medicinal herbs

•   Important tourism potential: natural monuments, mild
    climate, low level of pollution, monasteries, etc.

•   Road network rehabilitation and the consolidation of
    political situation in Yugoslavia (Serbia) could increase
    goods and persons traffic




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                              VIII Industrial Area “South Banat” and “Coal Basin Petrosani”

                                                       SWOT Analysis

Strengths                                                       Weaknesses
   • Crossed by an European transport corridor and with              •   The crisis affecting the heavy and mining industries had
     Danube connection, the area owns a diversified road                 a severe negative impact on the main mono-structured
                                                                         urban centers (mass-unemployment); concentration of
     and rail network, and has good connections with
                                                                         20 enterprises (1999), each one with above 1000
     Central Europe countries; it is served by Timişoara                 employees: Resiţa (4), Petroşani (4), Caransebeş (3),
     international airport                                               Deva (3)

   • Exploitable mineral resources (Petroşani Basin), wood,          •   Too high percentage of mining and metallurgical
     non ferrous ores, building materials                                qualifications and reduced capacity for industrial
                                                                         employment of female population (except Caransebeş)
   • The oldest concentration of metallurgical industry and          •   The large number of workers coming from other regions
     heavy mechanical engineering (Banat), traditional light             of the country developed, mainly in mining sector, a
     industry center (Caransebes) and main coal basin                    weak relationship with the tradition of industrial
     (pitcoal) of the country – Petroşani                                civilization of this area

                                                                     •   Heavy and mining industries caused the pollution of the
   •   Well-structured urban network, with remarkable
                                                                         air, waters and soil
       cultural life, high level of civilization and adequate
       services                                                      •   There are some highly vindicative workers' structures in
                                                                         Petroşani mining zone, with unfavorable international
   • Developed public educational system, at all levels,                 image
     focused on vocational and technical high schools                •   Migration of qualified young people to economically
     (Reşiţa, Petroşani, Hunedoara and Deva)                             active domestic areas (Timişoara, Arad) or abroad




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   • High tourism potential due to the originality and variety
     of relief represented by Banat Mountains (rural,
     hunting and fishing tourism) and Paring - Retezat
     Mountains

Strengths – continued -

   • Traditional relationships with Central Europe, both in
     trade sector and family relations, with favorable
     internal and external image of Banat craftsmen




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Opportunities                                                        Threats

  •   Fiscal facilities for investors in 6 “disadvantaged areas”          •   In the old complex enterprises from heavy and mining
      (Brad, Valea Jiului, Hunedoara, Rusca Montana, Bocşa                    industries people demonstrate low understanding and
      and Moldova Noua-Anina)                                                 inflexible appreciation of the new economic reality

  •   Favorable historical premise in setting up SMEs in                  •   Large number of employees with low capacity for
      traditional handicrafts – wood processing, glass,                       vocational shifts (mining and coal - and - steel sectors)
      ceramics and metal processing
                                                                          •   7 enterprises from siderurgy and services sectors are
  •   The existence of industrial infrastructure (available                   facing closure procedures
      production locations due to liquidation process)
                                                                          •   Recent social upheavals       (Petrosani, Resita) could
  •   Redundant labour force could be             employed in                 accentuate the unfavorable international image
      infrastructure works, environmental          rehabilitation,
      aforestation process, etc.                                          •   Important deforestations and lack of concern for
                                                                              environmental protection
  •   High level of civilisation for Banat population – guarantee
      for the adaptation to modern industry requirements                  •   Massive migration of well qualified people, who are not
                                                                              able to find an adequate job and who are not accepting
  •   Abundant Mediterranean type flora – source for setting                  the community disorder
      up medicinal herbs and wild fruit processing centres

  •   Co-operation relations with Central Europe in economic
      field and family relations with German emigrants, based
      upon multicultural traditions

  •   Favourable conditions for setting up recreation and
      scholar holidays centres and also for the offer of
      vacation houses, in deserted villages




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                               IX. Mining and Quarrying Industry Area “Apuseni Mountains”
                                                    SWOT Analysis


Strengths                                                       Weaknesses

   • Well-delimited geo-economic area, with transport                •   Mono-industrial urban centers – mining and quarrying –
                                                                         in mountain area
     facilities in all directions, surrounded by European
     road corridors, served by international railways, having        •   Many enterprises own obsolete equipment
     in its proximity the airports from Cluj, Sibiu, Arad and
     Timisoara                                                       •   Major problems related to the restructuring process of
                                                                         mining, metallurgical and military industries
   • Diversified industry, with well-qualified staff
                                                                     •   Insufficient protection works   against   floods   and
                                                                         landslides (Valea Tîrnavelor)
   • Mineral resources (gold and silver ore) and forests
                                                                     •   Migration of German population and of young qualified
   • Vocational and high school centers located nearby                   people
     (Cluj, Tg. Mures, Sibiu, Timisoara, Oradea)
                                                                     •   Massive deforestation
   • Complex urban network, well structured, with adequate
     services (natural gas supplying networks)

   • Hard-working population, with high level of civilization
     and strong relations with Central Europe

   • Obvious ethnographic identity, with strong handicrafts
     traditions

   • Local initiatives generated new SMEs, many of them

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      with foreign investment

Opportunities                                                    Threats

  •   A lot of important enterprises       are   included   in        •   Ecological unbalances caused by multiple pollution of the
      restructuring programmes                                            air, water and soil

  •   Good chances to recover lost handicrafts                        •   A lot of enterprises are in stand-by or facing bankruptcy
                                                                          procedures
  •   Remarkable tourism potential: agro-tourism in the
      mountain area, water tourism in salted lakes, hunting,          •   Industrial activity and labour force are concentrated in 10
      cultural and transit tourism                                        enterprises, with more than 1000 employees, difficult to
                                                                          be restructured




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     X. Extractive Industry of Maramures and the predominant Light Industry area of North Transilvania

SWOT Analysis



Strengths                                                      Weaknesses

                                                               •     Personnel restructuring and liquidation of enterprises in
• Favourable railway and road traffic relations towards West         mechanical engineering and wood industry located in
  and South, including airports in Baia Mare and Cluj (in            Maramureş and other branches of the light industry in
  proximity)                                                         Transilvania

• Diversified natural resources: gold and silver ore deposits • High unemployment, particularly amongst the female
  (Baia Mare, Baia Sprie, Cavnic) as well as non-ferrous         population, in Maramureş
  mineral (Cu,Pb), lignite, gritstone, kaoline (Negreşti Oaş), • Lack of high-tech industry and insufficient use of highly
  salt (Dej), wood, hydrothermal springs (Sangiorz Bai)          qualified labour force

• Depression of Maramureş is specialised in extractive • In Maramureş, important ecological desequilibria, with
  industry, in minerals and wood processing, and North     negative international impact, caused by residue dump from
  Transilvania distinguishes itself by various branches of the mining pools: pollution of Tisa, Săsar (Borşa-Vişeu); high
                                                           levels of air and soil pollution (Baia Mare – Baia Sprie), and
  the light and food industry.                             in North Transilvania –landslides, floods

• Settlement network with diversified inter and intra-regional • Long distance to Bucharest and reduced relationships with
  connections; developed tertiary services                       Ukraine

• Population with diversified vocational qualifications, with
  a high level of civilisation; the area is served by a dense
  network of schools, Technical University of Baia Mare and Weaknesses – continued -

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   by the Universities of Cluj, Oradea and Tirgu Mureş (in
   proximity)                                              • Industrial activity and workforce are concentrated in 19
                                                                     enterprises with more than 1000 employees (1999 figures),
                                                                     out of which 8 are in Baia Mare, 5 in Bistrita Nasăud and 3 in
Strengths –continued -                                               Dej

• Maramureş is particularly characterised by original • Inadequate physical                    infrastructures   and     insufficient
  traditional handicrafts (wood and textiles)           endowments

• Unique but insufficiently exploited touristical objectives   •     Insufficient internal network of modernised roads

                                                               •     Migration of the population towards local attraction centres
• Culinary specialities, traditional customs and national            in the area (Cluj, Oradea) and emigration to Germany. Large
  costums characterised by unicity                                   numbers of young people who went abroad in search for
                                                                     jobs




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Opportunities                                                      Threats

•   Existence of infrastructure development programmes             •     Extreme specialization in exploiting and processing non-
                                                                         ferrous metals within the Maramures sub-zone; production
•   3 disadvantaged areas have been declared: Baia Mare                  units therein, with large numbers of employees who suffered
    (Baia Mare, Baia Sprie, Cavnic) with 752,25 sq. Km, Borşa -          drastic reductions in personnel as a result of restructuring
    Vişeu (Borşa and Vişeul de Sus) with 867,18 sq.km and                (15 mines) or closure of the mining activities (11 mines with
    Rodna (Sângeorz Băi) with 1225,84 sq.km, where investors             7000 employees)
    benefit, according to the law, from a series of facilities
                                                                   •     Massive restructuring of enterprises in mechanical
•   Proximity to Oradea and Cluj centres, which are already              engineering industry (Baia Mare) and wood industry
    targeted by foreign investors                                        (Sighetul Marmatiei).

•   Positive influence of the programmes initiated by the •              3 enterprises with more than 1000 employees are included
    International Bodies regarding ecological disasters                  in closure programmes or bankruptcy procedures in the
    calamities with cross - border impacts                               extractive, non-ferrous metal and wood processing
                                                                         industries
•   Mechanical engineering enterprise from Negresti Oas is
    included in PSAL1 privatisation programme              •             In North Transilvania sub-zone several small and medium -
                                                                         sized enterprises in the field of food, textiles, transport, trade
•   In North Transilvania – experience in various light industry         industry will be included in restructuring / liquidation
    branches                                                             programmes and even face bankruptcy procedures

•   International promotion of the tourist uniqueness of the •           Perpetuation of the image of Maramures as an areal –
    Maramures heritage (wood churches, Săpînţa-the gay                   source of ecological disasters
    cemetery, specific folklore, culinary specialities)
                                                             •           Migration of the young population
•   The area is relatively well - known abroad
                                                             •           Illegal and abusive deforestation


                                   XI. The Complex Industrial Area "Central Transilvania "

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SWOT Analysis


Strenghts                                                         Weaknesses

                                                                    • Very difficult restructuring of mechanical engineering
  • The road transport network – European corridor –and               (Braşov, Făgăraş, Rupea, Râşnov, Miercurea Ciuc),
    railways are well-developed having connection with                chemical (Făgăraş) and military industry
    adjacent areas; area is served by Sibiu, Tîrgul Mureş and
    Cluj airports; Brasov is a turntable for the main road          • Strong social impact of unemployment in mono-industrial
    transport axes and an important railway junction                  cities (Târnăveni, Luduş, Vlăhiţa, Dumbrăveni, Copşa
                                                                      Mică, Râşnov, Făgăraş, Victoria, Întorsura Buzăului)
  • The main natural resource is represented by natural gas         • High concentration of industrial activities in some 25
    deposits from central -Transilvanian area; other                  enterprises, with more than 1000 employees each of them
    resources are : wood, mineral waters (Zizin), refractory
    argil, building materials (Racoş, Vlăhiţa), industrial          • Migration of the German population
    plants and viticulture
                                                                    • Floods and landslides on Tîrnava Valley
  • It is the main industrial area of Romania, with massive
                                                                    • Areas with high level of air (Copşa Mică, Făgăraş,
    concentration of mechanical engineering, special                  Victoria, Târnăveni) and soil pollution (Copşa Mică)
    chemical industry, light industry, glass and ceramic,
    food industry. The industrial core of this area is
    represented by Brasov and its industrials satellites
    (Râşnov, Codlea, Bod, Săcele and Zărneşti)

  • The settlement network is well-structured (dominated by
    Braşov with over 300.000 inhabitants) with favourable
    urban facilities, natural gas supplies in villages, complex
    tertiary and banking services etc.,



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Strenghts – continued -

• Multi-ethnical population with high level of civilization
  and tradition in industrial activities, well-educated in the
  spirit of hard work and order, trained in various domains

• Large and diversified network of schools, served by
  Braşov University and nearby located university centres
  in Tg. Mureş, Sibiu, Cluj and even Bucharest

• Powerful German influence in urbanism, architecture,
  life style, traditional handicrafts of high quality

• Traditional trading and family relationships with Central
  Europe

• Successful privatizations with foreign investors (Braşov
  – Jacobs-Suchard, Europharm, Luduş - Sugar), bringing
  a plus of confidence in the economic development
  potential of the area

• Very complex tourism activity, all year round, related to
  towns (Braşov - Kronstadt, Sighişoara-Schessburg),
  monuments like Bran, as well as a natural potential well-
  known in Europe



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Opportunities                                                        Threats

  • Favourable geographic location, diversified infrastructure,        • Many enterprises at risk of closure
    educated and hard-working people, population with
    international fame, all represent a basis for investment           • Failure of efforts in restructuring and privatization of big
    concentration in light industry and small series handicraft          mechanical engineering units could lead to major social
    articles designed for export                                         upheaval

  • A programme aimed at attracting back the Hungarian and             • Increased number of inefficient privatizations (Nitramonia
    German specialists who emigrated from Romania in view                - Făgăraş, Sugar– Bod etc.), may have a negative impact
    of them establishing SMEs could be started with the                  on the image of the area
    support of relevant foreign organizations
                                                                       • Perpetuation of pollution, landslides and deforestation
  • The natural landscape and urban medieval heritage                    effects
    represents a basis for diversifying international tourism,
    particularly targeted to Germans communities                       • Migration of the young and well-trained work-force (either
                                                                         abroad or to Bucharest)
  • Fiscal facilities in the disadvantaged area of Baraolt (128
    sq. km) – former coal exploitation - extension of the World        • Massive migration of specialists and of Hungarian and
    Bank programmes (limiting air pollution in Copşa Mica)               German population
    and integrating cities with well-preserved medieval
    structures (Mediaş, Sighişoara, Braşov, Râşnov, Făgăraş            • High weight of military industry in the area's economy
    etc.) in programmes for preserving universal heritage

  • Many enterprises are included in restructuring programes

  • High tourist potential due to originality of architectural and
    cultural heritage of some cities (Braşov, Râşnov,
    Sighişoara, Făgăraş, Rupea) and mountain relief (Braşov,
    Râşnov, Bran, Întorsura Buzăului)




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   Annex 4.4 Reference to relevant Government Strategic plans and studies for SMEs

   The implementation of the Governmental Programme towards SMEs is the main task of
the Ministry for SMEs and Co-operatives, established by G.D. no. 15/January 4-th, 2001 as
a specialised central public administration body specially mandated in this respect.
   The Ministry for SMEs and Co-operatives participates in elaboration and
implementation of the strategy and the programmes aiming at stimulating SMEs
establishment and development, elaborates required changes to the legislative and
institutional framework for achieving the objectives of programmes with SME
impact, ensures administration of the allocated budgetary and non budgetary
financial resources and their distribution to support SME development, as well as
monitoring and controlling the observance of legislation in force related to its field
of activity.
     For illustrating the role and importance of SMEs in Romania, the following official
indicators are relevant:
    • The number of active SMEs was 394,500, representing 97% from the total
      commercial companies lodging their balance sheets on December 31, 1999; the
      private SMEs represented 99%;
    • SME sector weighted 49.9% in the total turnover and 47% in the total net profit of
      active commercial companies;
    • SME sector absorbed 40% of the total workforce, that weighting 27% in the total
      wage fund;
    • SMEs contributed with 44.9% to the GDP.

The measures targeting SMEs development in the period 2001-2004 will focus on the
intervention to maximise sector’s potential to contribute to the economic re-launching, job
creation, promotion of innovation and technological advance, strengthening
competitiveness and generating a medium class development. In this respect,
Government set as priority the following objectives:
   a) Creation of an enabling and stimulative business environment, by simplifying and
      improving the legal and administrative environment, by re-instituting the stability and
      predictability of the legal and regulatory framework, by eliminating the administrative
      barriers and reducing the corruption. In this respect, the elaboration of simplified
      procedures for registration and authorisation and licensing is currently under way.
   b) Enhancing SME sector competitiveness through better information services,
      financial support for innovative and implementation oriented projects undertaken by
      enterprises, including projects with a view to introducing international quality
      systems, economic infrastructure development, including the creation of a network
      of business advisors which will ensure the access of the entrepreneurs to
      information related to the development of the business, as well as facilitating the
      entrepreneurs general access to training programmes and to the information
      society..
   c) SME export promotion through support measures aiming at increasing the
      Romanian firms participation in international fairs and exhibitions, at extending the
      informational system related to international business opportunities, at
      disseminating among entrepreneurs information about regulations in force or
      applicable in the single European market, at co-funding the participation of


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      Romanian enterprises in the EU programmes oriented towards the establishment of
      cross border co-operation, as well as at simplification of export credit insurance
      procedures.
   d) Promote investment in SMEs sector through measures aiming at strengthening the
      investment-oriented influence of the tax system, at establishing of a national credit
      guarantee fund to facilitate SME access to accessible finance and at promoting and
      developing new modern financial instruments.

 Incentives for SMEs
Law no. 133/1999 regarding the stimulation of private entrepreneurs to set up and develop
SMEs includes a set of economical, financial and fiscal measures to stimulate SMEs
development, as follows:
  • Ensuring SMEs’ access to public procurement
  • Ensuring SMEs’ access to available assets of state companies;
  • Promoting production, services and product competitiveness, through facilitating the
    import of machinery and equipment, and related licences needed to develop its own
    production or services activity, exempting them from custom duties;
  • Tax-exemption of the gross profit reinvested for the development of production and
    services, and by reducing the tax on profit for the enterprises creating new jobs;
   • Facilitating the SMEs’ access to information, assistance, consultancy, research and
     technologic innovation services, vocational and managerial training for SMEs, as
     well as to financial sources through annual programmes.




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                                                          Annex 4.5 VET SWOT Analysis

Feasibility Study on the continuation and extension of the structural reform of VET within the Educational System of Romania
Executive Summary of Main Findings                -     Analysis of strengths, weaknesses, opportunities and threats (SWOT
analysis)

Level and        Strengths                           Weaknesses                           Opportunities                          Threats
subjects
National level   -   continuing reform since 90's    2) fragmented delivery of VET        -   formal policy on centres for       -   quality of VET because of
Policy           -   outcomes of Phare 9405          2) differences in teaching staff:        initial VET, lifelong learning &       shortening of duration of
                     reform legislated                  teachers and instructors              training on demand                     VET programmes
                 -   national VET standards          3) change to more                    -   consider structure with            -   fragmented system not
                     enable performance criteria        decentralised structure not           parallel full time & parttime          cost effective
                 -   school curricula 70% national      parallel with new definition of       VET                                -   modern VET provision not
                     requirements up to 30% local       responsibilities                  -   specify role of all actors in          sufficiently available in
                 -   introduction of guidance and    4) specific role of social               VET for all levels, including          rural areas
                     counselling in the curriculum      partners not clearly defined          their responsibilities,
                 -   decentralised implementation                                             accountibility
                     of Phare 9405                                                        -   decentralise governance
                 -   involvement social partners                                          -   consider responsibility of
                 -   training demand of non-                                                  social partners and national
                     Phare 9405 schools                                                       organisations of teachers and
                                                                                              directors for developing and
                                                                                              maintaining national curricula
Policy           -   Phare project management        -   impossibility to equip all       -   establish institute for initial    -   increasing gap between
implementation   -   co-operation schools/social         schools to EU standards              teacher training in vocational         well equipped schools
                     partners                        -   Unsufficient capacity of             subjects, with full time and           and those that are not,
                 -   new curriculum design for           NCDVET to serve all schools          parttime courses                       threatening the latter's
                     VET in view of labour market        lack of clear responsibility     -   in-service teacher training co-        existence
                     demands                             and accountibility actors in         ordinated by NCDVET                -   lack of co-ordination
                 -   National Advisory Group on          VET                              -   review role MoER, MoLSS,               hindrance to in-service
                     VET                             -   weak communication tri-              Inspectorate, County and               teacher training
                 -   Decentralised                       partite structure with county        Local authorities, school          -   tri-partite structure losing
                     implementation of Phare             and local level                      directors re                           interest in VET
                     9405 led to great               -   no overall training of school        decentralisation/implementati      -   segmentation of VET
                     involvement of all actors           teams in Phare 9405 schools          on of reform in VET                    schools due to
                 -   Strong self-confidence          -   co-ordination of                 -   specialised training of actors         underperforming school
                     former participants in Phare        generalisation                       involved in decentralisation           management
                     9405                            -   generalisation in rural areas        and implementation of reform
                 -   Expertise for implementing      -   intial teacher training not          in VET

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Level and           Strengths                            Weaknesses                            Opportunities                        Threats
subjects
                       reform through peer training          functional to teacher             -   evaluate regularly if national
                    -  Core of peer trainers created         profession in modern VET              curricula need updating
                    -  PMU transformed into              -   insufficient qualified teaching   -   survey how national curricula
                       NCDVET                                staff in rural schools                have to be adapted in view of
                    - Implementation outcomes            -   under-use of human                    shortening duration of VET
                       Phare VET reform                      resources in centralised          -   modular curricula and
                       decentralised to County               structure                             learning methods for adults
                       Inspectorate                      -   reform in technical high          -   develop dissemination
                    -   Qualified staff in urban             schools lagging behind                strategy for results reform
                    schools                              -   dissemination training                programmes
                                                             modern management lagging
                                                             behind
National level      -   co-operation with donors         -   insufficient funding for          -   create a more cost effective     -   lack of funding does not
Funding                 resulted in funding of               generalisation                        VET structure                        facilitate massive in-
                        successful reform                                                      -   continue reform with a co-           service teacher training
                        programmes                                                                 funded programme as a
                                                                                                   catalyst
                                                                                            -
Governance          -   implementation of Phare     -        no formal role for social      -      focus national activities to   -     non-governmental actors
                        9405 outcomes decentralised          partners                              legal matters, qualifications,       losing interest in VET
                        to county level             -        strong involvement in                 funding, national curricula    -     lose of momentum of
                    -                                        detailed governing of delivery -      decentralise governance of           reform as started with
                                                             of VET                                VET schools to local                 Phare 9405
                                                         -   decentralised structure not           governing bodies with even
                                                             properly prepared for new             representation of local
                                                             responsibilities                      authorities and social
                                                                                                   partners
Area/County level   -   6 Zonal VET Development          -   coping with with role to          -   taking on policy role           -    VET not available to all
Policy                  Committees in place, each            develop policy                    -   development of a strategy for        young people and adults
                        covering several Counties        -   lack of strategy                      dissemination of Phare 9405 -        economic development
                    -   Local Committees for Social          dissemination of Phare 9405           outcomes                             falls behind that of other
                        Partnership Development in           outcomes                          -   planning of VET delivery             area/Counties
                        VET in place, at County                                                -                                   -
                        level
                    -   tri-partite structure in place
Policy              -   NCDVET zonal co-ordinators       -   weak communication tri-           -   training of actors in VET        -   lack of information of
implementation          acting as catalysts                  partite structure with national       structure                            economic development
                    -   Strong self-confidence               and local level                   -   development of training              trends might lead to less
                        former participants in Phare     -   VET not seen as a first               programmes for mentors of            effective investment in

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Level and     Strengths                             Weaknesses                           Opportunities                        Threats
subjects
                  9405                                  priority by some actors              student trainees in                  VET
              -   Large potential of peer-          -   some schools offering VET            enterprises                      -   unclear roles of actors in
                  trainers                              programmes for which there -         co-ordinating peer training at       VET might lead to friction
              -   Some Inspectorates                    is no longer a demand,               County level                         and loss of interest
                  demonstrating leadership in       -   lack of mentors in enterprises -     disseminate tool of a County
                  taking action with limited            when students do their               to identify economic
                  means, encouraging schools            practical there                      development in all Counties,
              -   good communications                                                        co-ordinated by NCDVET
                  especially between Phare
                  9405 schools, sharing
                  knowledge and experience
              -   Lack of analysis of HR needs
                  led to the initiative of a
                  County to bring all actors
                  together to identify economic
                  development trends and
                  subsequent training needs
Funding       -   decentralisation of               -    very limited funding available -    survey of the effectiveness      -   funding for training which
                  responsibilities went parallel         for existing County                 and sustainability of present        is no longer in demand is
                  decentralisation of part of the        responsibilities                    VET provision in the County          usurping funding, which is
                  funding since the County          - decentralisation of part of       -    reconsider the continuing            badly needed elsewhere
                  level has better detailed view         VET funding was not                 existence of schools which           in the VET structure
                  of needs                               accompanied by appropriate          are providing VET not in         -
              -                                          funding                             demand
                                                                                        -
Governance    -   decentralised governance          - diffuse responsibility of         -    consider further                -    Governance at a distance
                                                    respective actors in governance          decentralisation to local            does not result in direct
                                                                                             (=town) level, keeping               involvement in VET
                                                                                             planning of provision and            delivery
                                                                                             quality control at County level -
                                                                                         -
Local level                                         -   no formal role at formal level   -   local authority in co-operation -    schools asking to enforce
Policy                                              -                                        with Inspectorate to bring           obligations upon social
                                                                                             together all VET schools with        partners and enterprises
                                                                                             social partners/enterprises     -    schools acting as
                                                                                             and employment agency for a          separate entities trying to
                                                                                             concerted action                     gain profit for their
                                                                                         -   support schools to be                institute and its students
                                                                                             involved in the new Phare

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Level and        Strengths                           Weaknesses                            Opportunities                        Threats
subjects
                                                                                               project in close co-operation
                                                                                               with other VET actors
Policy           -   strong self-confidence former   -   no strategy for dissemination     -   maintain concerted action of      -   lack of co-operation might
implementation       participants in Phare 9405          of Phare 9405 outcomes                all actors in VET to realise          lead to loss of training
                 -   positive experiences of         -   weak communication tri-               provision continuation of initial     opportunities
                     partnerships between social         partite structure with national       VET, lifelong learning and
                     partners/enterprises and            and county level                      training on demand
                     schools                         -   no clearly defined roles of       -
                 -   former Phare 9405 schools           actors in VET structure
                     work actively on partnership    -   lack of information on
                     with social                         economic developments and
                     partners/enterprises                consequential lack of
                 -   good communications                 information on training
                     between Phare 9405                  demand
                     schools, directors and staff    -   success partnerships with
                     actively sharing knowledge          social partners/enterprises
                     and experience                      depend on initiative of
                 -                                       schools

Local level      -   underfunding by national,      -    hardly any local authority has -      arrange a meeting with all       -    VET schools unable to
Funding              county and local authorities        funds available to support            actors in VET to see what             provide VET equal to EU
                     led to actions of school            local VET schools                     can be done together, to              standards
                     directors to try to supplement -                                          enable VET to play an active     -
                     funding                                                                   role in regeneration of the
                                                                                               locality
                                                                                           -   the school to become part of
                                                                                               the new Phare projert
Governance       -   no real governing role at       -   directors appointed by the   -        strengthen MoER's                -    divided responsibilities will
                     present                             inspectorate                          decentralisation policy by            not help to create a cost
                                                     -   teaching staff appointed by           creating governing bodies at          effective system
                                                     -   teaching staff paid by the            local level                      -
                                                         MoER                         -
                                                     -   local authorities to fund
                                                         maintenance of the building
                                                     -   some directors taking on new
                                                         responsibilities
                                                     -   no clearly defined role for
                                                         social partners/enterprises
School level     -   opportunity to complement       -   no clearly defined roles of  -        develop a school mission in       -   lack of co-operation might

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Level and        Strengths                            Weaknesses                            Opportunities                          Threats
subjects
Policy               the national curriculum with         actors in VET structure               concerted action of school,            lead to lose of interest in
                     up to 30% local input            -   no clear role of parents              parents and other local actors         the school as an actor in
                 -                                                                          -                                          regeneration of the
                                                                                                                                       locality
                                                                                                                                   -
Policy           -   management of Phare 9405         -   difficulties in delivering        -   structured monitoring of           -   the school to be unable to
implementation       schools show leadership,             practical training according to       school leavers to check if             contribute to the activities
                     iniative and entrepreneurship        new curriculum due to                 provision of VET is in line with       of a group of schools
                 -   provision of VET by Phare            absence of adequate                   requirements                       -   the school unable to
                     9405 schools is flexible and         equipment in non-Phare            -   external support for whole             contribute to the
                     takes local needs inot               9405 schools                          school approach                        economic regeneration of
                     account                          -   co-operation school -social           improvement of VET                     the locality
                 -   schools taking part in Phare         partners/enterprises weak in          provision                          -   enterprises and the
                     9405 and adopting the                non-Phare 9405 schools            -   entrance testing of students           employment agencies
                     provision of relevant modern     -   attitude towards modern VET           followed by more                       turning to other training
                     VET saw enrolment increase           of teaching staff of non-             individualised learning                providers to deliver
                 -   Phare 9405 schools have              Phare 9405 VET schools,               programmes                             training
                     formed partnerships with             and of social                     -   co-operation with all other        -   the school might cease to
                     actors in the economic               partners/enterprises erratic          VET schools in the locality to         exist and with it VET
                     development of their locality    -   differences between teaching          form a group of schools                provision for young
                 -   Phare 9405 schools seek              staff trained in Phare 9405           focusing on effective VET              people
                     local information to adapt the       and those who are not                 provision                          -   schools as production
                     curriculum to local training     -   a great division in interest,     -   the school as member of a              units might not offer
                     needs                                knowledge and capability of           group of schools to mform a            sufficient practical
                 -   Phare 9405 schools use the           newly enrolled students               partnership with social                learning experience to
                     opportunity to complement        -   teaching staff who did not            partners/enterprises and               students
                     the national curriculum with         take part in Phare 9405               other economic actors
                     up to 30% local input                training experience the           -   regular contact between VET
                 -   especially Phare 9405                curricula as overloaded               teaching staff and enterprises
                     schools seek the involvement     -   low degree of involvement of          might lead to improved and
                     of parents                           instructors and general               regularly updated VET
                 -   Phare 9405 seek co-                  education teaching staff in           provision
                     operation with other VET             Phare 9405 training               -   partnerships with lower
                     schools in their locality        -   schools, producing for the            secondary schools to develop
                 -                                        market, to gain income for            ongoing learning programmes
                                                          consumables
                                                      -   enterprises complain that
                                                          some VET teaching staff
                                                          are not prepared to

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Level and      Strengths                          Weaknesses                          Opportunities                        Threats
subjects
                                                      collaborate with their
                                                      employees
School level   -   many Phare 9405 trained        -   inadequate funding and as       -   to create a group of VET         -   inadequate funding for
Funding            school directors take the          such inadequate equipment           schools and to demonstrate           equipment and
                   initiative to find                 and insufficient consumable         that all training needs can be       consumables, leave alone
                   complementary funding, e.g.        does not offer opportunities        responded to in an effective         for salaries endangers the
                   by offering training using         to raise complementary              way, at any place, at any            provision of relevant VET
                   their modern equipment             funding                             time, as such adding to the          and as such a
               -                                  -   schools do not get funding          income of the schools                contribution to the
                                                      for consumables                 -                                        regeneration of the local
                                                  -   some well equipped schools                                               economy
                                                      becoming centres of                                                  -   schools producing for the
                                                      excellence, producing for the                                            market might focus on
                                                      market, to gain income                                                   production instead of
                                                                                                                               students learning a trade
                                                                                                                           -   schools competing with
                                                                                                                               businesses, the latter
                                                                                                                               paying taxes e.g. to fund
                                                                                                                               schools
Governance     -   Phare 9405 trained school      -   many school directors do not    -   to form an advisory body for     -   partners might loose
                   directors take on a lot of         see opportunities to improve        the local group of VET               interest in the school as
                   responsibilities for the           to improve governance and           schools, consisting of               they have no real say in
                   running of the school,             stick to the rules                  representatives of social            its governance
                   communicate well with the      -   raised responsibility for           partners/enterprises,            -
                   Inspectorate and the local         school activity did not yet         employment agency, local
                   authority, involve social          lead to adapted governance          authority and parents
                   partners/enterprises and           regulations                     -
                   parents
               -   Development of the school
                   curriculum and especially the
                   local part complementing the
                   national curriculum raises the
                   responsibility of the school




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Annex 4.6 VET 2002
                                                 Phare Multi-Annual programming
                                                            Phare 2002
                                                      Activities and Results
Investment




Year 2002
Levels of                  Results                           Activities                           R ole of the TA
intervention
National        Secured quality of delivery      Coordination of delivery and TA will assure quality of delivery
                and installation of equipment    installation of equipment
Regional/loca   Equipment for specialised        Delivery and installation of TA will supervise the delivery and
l               workshops      installed  and    specialised equipment        installation
                delivered to 100 schools and
                11 inside area centres
                School staff of 100 schools      Training for using the equipment TA will assist in providing training for
                and 11 resource centres          provided to teaching staff       equipment
                trained for the use of
                specialised equipment
County/Scho     Teachers for 100 schools         Integrate equipment      into   the TA will assist in providing training for
ol              and 11 resource centres          training process                    equipment
                inside    areas      use   the
                equipment according to the
                new revised curricula




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Annex 4.7. Summary of implementation procedures

                                          INSTITUTIONAL RESPONSIBILITIES
                             Phare Economic and Social Cohesion 2001, Investment Component

                                 Implemen-  Implementing
Code Investment Components          ting     Authorities                Steering Committee             Project Selection Mechanism
                                  Agency
A.    Assistance to small and    MDP       RDAs                      MDP, RDA, Ministry of          - local open calls
      medium sized enterprises                                       SMEs and Cooperation           - Regional Selection Committees
                                                                     (MoSMEC), Ministry of          including RDAs, representative of
                                                                     Labour and Social Solidarity   MoSMEC, independent evaluators;
                                                                     (MoLSS), Ministry of Waters    observers from MDP, MEI, EC
                                                                     and Environment Protection     Delegation
                                                                     (MWEP), aso
B.    Technical and Vocational   MDP                                 MDP, RDAs, Ministry of         - Regional Consortia: RDAs, County
      Education and Training                                         Education & Research           school Inspectorates, County
                                                                     (MER), MoLSS, aso              Committees for Social Partnership
                                                                                                    Development VET
                                                                                                    - Regional Consortia will select the
                                                                                                    schools and identify needs
      Works contract                       MDP
      Supply of equipment                  MER
C.    Social Services            MDP       RDAs                      MDP, RDAs, MoLSS, MER       - local open calls
      investment scheme                                                                          - Regional Selection Committees
                                                                                                 including RDAs, representative of
                                                                                                 MoLSS, independent evaluators,;
                                                                                                 observers from MDP, MEI, EC
                                                                                                 Delegation
D.    Regional/large-scale       MDP       MDP                       MDP, RDAs, Ministry of      - maturity and impact of projects
      infrastructure                       National                  Public Works, Transport and appraised at regional level
                                           Administration of         Dwellings (MPWTD),          - list of projects approved by RDBs
                                           Roads (NAR) for           MWEP, Ministry of Tourism - final approval by NBRD based on

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                                   national roads         (MT)                          RDB proposals
E.   Small-scale local       MDP   RDAs                   MDP, RDAs, Ministry of        - local open calls
     infrastructure scheme                                Public Works, Transport and   - Regional Selection Committees
                                                          Dwellings (MPWTD),            including RDAs, independent
                                                          MWEP, Ministry of Tourism     evaluators,; observers from MDP,
                                                          (MT)                          MEI, EC Delegation




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                                                IMPLEMENTATION PROCEDURES
                                  Phare Economic and Social Cohesion 2001, Investment Component

                                       EC            Ministry of                Other             Regional
 No.       PROGRAMME               Delegation /   Development and          Institutions at      Development             Beneficiaries
             CYCLE /                 National     Prognosis (MDP)        (inter)national/re    Agencies (RDAs)
           Main activities          Fund (NF)                               gio-nal/local
                                                                                level

I.      FRAMEWORK AGREEMENTS
I.1     SMEs schemes (A),         Endorses        Negotiates and                              Negotiate and signs
        social services (C) and                   signs                                       as Implementing
        small-scale                                                                           Authority
        infrastructure (E)

I.2     Regional/large scale      Endorses
        infrastructure (D)
        - Framework                               Negotiate and signs                                                Negotiate and signs
        agreement with                            as Contracting
        beneficiary for local                     Authority
        contribution and Phare
        + national budget

I.3     TVET component (B)         Endorses
        - Framework contract                      Negotiate and signs                         Negotiate and signs
        for schools                               as Contracting                              for monitoring works
        rehabilitation                            Authority              MER negotiate        contracts
        - Framework contract                      Negotiate and signs    and signs as
        for equipment supply                      as Contracting         Implementing
                                                  Authority              Authority
II.     LAUNCHING CALLS FOR
        PROPOSALS
II.1.   Components A, C, E


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II.1.1   Draw-up Guidelines for endorsed by      Prepare information Contribute to the      Consultation
         applicants             EC               package and          package
                                Delegation       guidelines for
                                                 applicants
II.1.2. Public launch of calls                   Press releases and                         Press releases and      As target groups are
        for proposals,                           organise information                       organise information    invited to information
        information campaign                     seminars                                   seminars in the         seminars
                                                                                            region
II.1.3. Receiving applications                                                              Receives and register   Submit applications
                                                                                            applications            to RDAs
II.1.4. Appointment of           Approved by     Nominate observer      Nominate            Appoint Regional
        Regional Evaluation      EC              and send to EC         observer and        Evaluation
        Committee                Delegation      Delegation the         send to MDP         Committee, submit to
                                 and nominate    whole composition                          RDBs and send to
                                 own observer    of Regional                                MDP
                                                 Evaluation
                                                 Committees
III.     APPRAISAL AND SELECTION OF
         PROJECTS
III.1    Components A, C, E
III.1.1 Appraisal and            EC              Observer and           Observers in the    Organise the
        selection of projects    Delegation      checks the             Regional            process, prepare
                                 endorses list   Evaluation Reports     Evaluation          Evaluation Reports
                                 of selected     from RDAs              Committees          and send to MDP
                                 projects

IV.      REGIONAL PROJECTS
         CONTRACTING
IV.1.    Grant contract for                      Signs as                                   Prepare contract and    Signs
         components A, C, E                      Contracting                                signs as
                                                 Authority                                  Implementing
                                                                                            Authority
IV.2.    Works contract for D    endorsed by     Prepare tender         Constructor offer                           Contribute to tender

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        component              EC Del.       documentation and      Negotiate and                           documentation
                                             launch tenders         signs
                                             Negotiate and signs
                                             as Contracting
                                             Authority
IV.3.   Contracts for TVET     endorsed by
        component B            EC Del.
        - Works contract for                 Negotiates and         Constructor                             School Insp.
        schools                              signs as Contracting   negotiate and                           preparation of
        - Equipment supply                   Authority              signs                                   technical
                                             Negotiate and signs    Supplier                                specifications
                                             as Contracting         negotiate and                           School Insp.
                                             Authority              signs                                   preparation of
                                                                                                            technical
                                                                                                            specifications
V.      FINANCIAL MONITORING, PAYMENTS AND FINANCIAL CONTROL (separate material is attached)
V.1.    Processing Grant            Receives all the documents          RDAs register, check                Payment Claim
        Payment Claims and          from RDAs and the                   and endorse the                     together with
        Reports                     Monitoring Department               Payment Claims and                  technical and
                                    checks. If everything is Ok,        reports, complete a                 financial report send
                                    Monitoring Department               Checklist for each                  to RDAs
                                    approves the payment and            Claim and send them
                                    sends all the documents to          to MDP
                                    Paying Directorate; if not,
                                    asks RDAs for more
                                    information.
                                    Paying Directorate will
                                    check eligible expenses for
                                    each budget line, and if it is
                                    Ok, will issue two Orders for
                                    Payment: one for ABN
                                    AMRO Bank (Phare funds)
                                    and one for Treasury (co-


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                            financing).
                            If something is wrong, sends
                            the comments to
                            RDAs/beneficiary, asking for
                            more information.
V.2.   Financial Control    Orders for Payment (OP)
                            issued     by    the   Paying
                            Directorate are signed by the
                            following persons:
                            - SAO;
                            - Own Preventive Financial
                            Control: checks again the
                            justifying documents;
                            - Delegate Preventive
                            Financial Control: checks
                            again the justifying
                            documents;
                            - PAO.
                            OPs are delivered to ABN
                            AMRO Bank and Treasury
                            by authorized persons in the
                            Paying Directorate.
V.3.   Reporting Activity   Signed contracts, Addendum
                            and payments from Phare
                            funds    are     registered   in
                            PERSEUS reporting system by
                            Paying       Directorate.     A
                            PERSEUS report is sent to
                            Brussels, EC Delegation and
                            National Fund till 10th of each
                            month.
                            Monthly Reports and Requests
                            of Funs are made by the
                            Paying Directorate and sent to
                            the   National     Fund.    The

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                                       Request is also signed by own
                                       preventive financial control.
                                       All    payments      are      also
                                       registered in accordance with
                                       the     Romanian      accounting
                                       legislation.
VI.     TECHNICAL MONITORING, REPORTING AND CONTROL OF PROJECT IMPLEMENTATION
VI.1.   Components A, C, E
VI.1.   Financial and technical   Endorses        Design financial and                     - receives reports       - fill in and submit to
1.      reports                   templates for   technical reports                        from beneficiaries,      RDAs (initial, interim
                                  technical and   templates                                checks and endorses,     and final)
                                  financial       Approves reports                         and then submit to
                                  reports         and send to paying                       MDP
                                                  department                               - prepare quarterly
                                                                                           progress reports and
                                                                                           submit to MDP
VI.1.   Telephone inquiries                       Prepare the                              Prepare and send         - fill in questionnaires
2.      and dispatch of                           monitoring grid                          questionnaires to        send by RDAs and
        questionnaires                                                                     beneficiaries            MDP
                                                                                           according to
                                                                                           monitoring grid
                                                                                           Process data for
                                                                                           monitoring and
                                                                                           reporting
VI.1.   Monitoring visits and     Endorses        Design the visit                         Undertake monitoring     Provide all necessary
3.      reporting back            template for    report format                            visits at least once     support and
                                  visit report    Receive visits report                    during the contract      information for the
                                                  from RDAs and                            period and also          visit
                                                  approve                                  before final payment
                                                  Control a sample of                      Write reports on each
                                                  projects (5%).                           visit using for
                                                  Prepare reports                          endorsement of
                                                  after each visit and                     technical and
                                                  take corrective                          financial reports, and

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                                  actions                                       send to MDP
VI.1.   Monitoring project        Ex-post control for a                         Ex-post control         Prepare
4.      procurement               sample of 5%                                                          documentation for
        (according to Practical                                                                         tenders, tendering
        Guide for Phare)                                                                                and contracting
VI.2.   TVET component (B)
VI.2.   Financial and technical   Design financial and    Contractor for site   - receives reports      School Inspectorates
1.      reports                   technical reports       supervision of        from specialist         / School receives
                                  Approves reports        works prepare         supervisor, checks      reports and endorse,
                                  and send to paying      reports and send      and after beneficiary   and then submit to
                                  department              to RDAs and           endorsement             RDAs (works)
                                                          School                endorses, and submit
                                                          Inspectorates /       to MDP (works)          School endorse
                                                          Schools               - prepare quarterly     reports for equipment
                                                          Equipment: MER        progress reports and    supply (from supplier)
                                                          receives reports      submit to MDP           and submit to MER
                                                          from schools,
                                                          checks and
                                                          endorses, and
                                                          submit to MDP
                                                          - prepare
                                                          quarterly
                                                          progress reports
                                                          and submit to
                                                          MDP
VI.2.   Monitoring/control        Design the visit        Equipment: MER        Works: Undertake        Schools provide all
2.      visits and reporting      report format           Undertake             monitoring visits at    necessary support
        back                      Control a sample of     monitoring visits     least before final      and information for
                                  projects (5%).          at least before       payment                 the visit
                                   Prepare reports        final payment         Write reports on each
                                  after each visit and    Write reports on      visit
                                  take corrective         each visit            and endorse final
                                  actions                 and endorse final     payment and send to

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                                                                       payment and           MDP
                                                                       send to MDP
VI.3.    Regional/Large-scale infrastructure
         (D)
VI.3.    Financial and technical               Design financial and    Contractor for site - receives reports        Beneficiary and NAR
1.       reports                               technical reports       supervision of      from specialist           receives reports and
                                               Approves reports        works prepare       supervisor, checks        endorse, then submit
                                               and send to paying      reports and send    and after                 to RDAs
                                               department              to beneficiaries,   beneficiary/NAR
                                                                       RDAs and NAR        endorsement,
                                                                       for national roads  endorses and submit
                                                                                           to MDP
                                                                                           - prepare quarterly
                                                                                           progress reports and
                                                                                           submit to MDP
VI.3.    Monitoring/control                    Design the visit        Contractor for site Undertake monitoring      Provide all necessary
2.       visits and reporting                  report format           supervision         visits at least before    support and
         back                                  Control a sample of     provide all         final payment             information for the
                                               projects (5%).          necessary           Write reports on each     visit
                                               Prepare reports         support and         visit
                                               after each visit and    information         and endorse final
                                               take corrective                             payment and send to
                                               actions                                     MDP

VII.     EX-POST EVALUATION AND CONTROL
VII.1.   Ex-post evaluation and                Prepare quarterly                             Provide full support to Provide full access to
         control                               and final evaluation                          MDP in gathering all    project files and
                                               report                                        the information         records




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REGIONAL DEVELOPMENT

1. Law No.151/1998 on Regional Development in Romania
2. Government Emergency Ordinance No. 268/2000 for modifying and completion of
   the Law No. 151/1998 concerning Regional Development in Romania
3. Government Decision No. 634/1998 approving the methodological norms for
   application of the Law No.151/1998 concerning Regional Development in Romania
   and the framework Regulations for the organisation and operation of the Regional
   Development Councils. The art. 16, Annex 1 is rectified by the Rectification No.
   634/24.09.1998.
4. Government Decision No. 16/2000 concerning the organisation and functioning of the
   ministry of Development and Prognosis, modified and completed by Government
   Decision No. 340/2001
5. Government Decision No. 404/2001 for designating the members of the Government
   representatives in the National Board for Regional Development
6. Government Decision No. 544/1999 approving the Regulation for organisation and
   operation of the National Board for Regional Development
7. Government Decision No. 399/2001 concerning industrial restructuring areas with
   economic growth potential to which Phare 2001 funds – from Social and Economic
   Cohesion component – and the Romanian co-financing from the State Budget, will
   be focused
8.   Government Decision No. 749/1999 regarding the elaboration of National
   Development Plan for 2000 – 2002 (OJ 453/ 17.09.1999)
9. Law No.143/1999 on State Aids, promulgated by Decree No. 272/1999
10. Law No.189/1998 concerning the local public finance (OJ 404/22.10.1998)
11. Law No.72/1996 concerning public finance (OJ 152/17.07.1996)
12. Law No.213/1998 concerning public propriety and its legal status
13. The Government Decision no.1011/1999 for approval of the Memorandum of
      Understanding between Government of Romania and European Commission.
      Consequently, a National Fund was established, as a distinct body within Ministry
      of Finance , empowered to manage and to channel the E.C. funds in pre-
      accession period.
14. The Government Ordinance no 63/1999 regulates the financial management of the
   Phare funds as well as co-financing funds related to it.
15. The Ordinance no. 118/1999 on public procurement and the Ordinance no.119/1999
   on internal control and audit, adopted in August 1999 by the Romanian Government
16. The Ordinance No. 96/2000 for approval of the Financing Memorandum between
   the Government of Romania and European Commission for PPF Phare – RO9915
   (OJ 428/02.09.2000)




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Relevant Legislation in the field of
Technical and Vocational Education and Training
1999-2000-2001

•            MONEO      no. 4938/05.11.1998, regarding the approval of measures for
    implementing the VET reform curriculum for vocational school and post-high school
    (Phare VET RO 9405) in the school year 1998/1999.

•             GO no.855/26.11.1998, regarding the establishment         of the National
    Center for Development of Vocational and Technical Education

•             MONEO no.3230/10.02.1999, regarding the adoption of the Methodology
    for generalizing the Reform of the Technical and Vocational Education in the school
    year 1999/2000

•             Law no.132/20.07.1999, regarding the organization and functioning of the
    National Council of the Continuing Training of Adults

•             MONEO no. 4058/07.07.1999, regarding the antreprenorial education in
    preuniversity education in

•            MONEO no.4931/19.11.1999, regarding the curriculum for the facultative
    subject matters for the continuation of studies from vocational schools to high
    schools

•             MONEO no. 4932/19.11.1999, regarding the functioning of the National
    Council for Approval of Textbooks

•             MONEO no.4986/30.11.1999, regarding the establishment of the National
    Distance and Open Education Centre

•             MONEO no. 5021/06.12.1999, regarding the initial and continuing training
    of teachers within the pre-university education system

•            MONEO       no.    5021/06.12.1999, regarding the link between the
    educational system and the economic environment

•             MONEO no. 5145/28.12.1999, regarding the decentralization of the
    preuniversity education and the institutional autonomy of the school inspectorates,
    schools, and high schools

•             MONEO no. 5157/29.12.1999, and MMPS no.74/07.01.2000 regarding
    the approval of the certification system and of the methodologies for organising the
    final exams in vocational schools

•             MOERO no.3007/03.01.2000, regarding the financing of VET at the
    request of the economic agents and other institutions

•             MOERO no. 3058/17.01.2000, regarding the organization of the post-high
    schools in public and private institutions



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•             MOERO no. 3062/18.01.2000, regarding the programmes for adult
    education through schools, high-schools and Teachers’Houses

•             MOERO no.3064/18.01.2000, regarding the vocational guidance and
    counseling within the educational sytstem

•            MOERO no. 3750/08.05.2000, regarding the preparation of extending the
    compulsory schooling to 9 years

•             MOERO no.4093/04.07.2000, regarding the Reglementation of admission
    in vocational and apprenticeship schools for the school year 2000-2001

•             MOERO no. 4277/09.08.2000, regarding the vocational training through
    apprenticeship schools

•             MOERO no.4312/16.08.2000, regarding the education for quality in the
    pre-university system of education in Romania

•          MOERO 4375/26.08.2000, regarding the amplification of the programme
    “ COMPUTERS IN SCHOOLS AND HIGH-SCHOOLS”

•              MOERO 4447/05.09.2000,regarding the institutional autonomy of the pre-
    university school units

•             MOERO no.4604/21.09.2000, regarding the school year structure 2001-
    2002

•             MOERO no. 4923, 4922, 4920, 4924, 4981/2000, regarding the approval
    of the school curricula

•             MOERO 5363/15.12.2000, regarding the approval of the subjects within
    the curricular area of Technologies and of the Methodology for registration of
    students for different specializations in grade XI and grade XII

•             MOERO 3592/03.04.2001, regarding the practical training required for
    Technical High Schools

       GO = Government Ordinance
       MONEO = Ministry of National Education Order
       MOERO= Ministry of Education and Research Order




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LEGISLATION IN THE FIELD OF SOCIAL SECURITY


1. Law no 69/1991 on decentralization and local autonomy - responsibility of the
   local authorities to coordinate and administrate social services;

2. Law no 34/1998 - subsidies to social assistance units developed by NGO’s;

3. Law no 208/1997 - local canteens for the poors organized by the local councils;

4. Law no. 17/2000 - social assistance for elderly;

5. The law project on the social assistance system organization;

6. The law project concerning the minimum guaranteed income




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SMEs LEGISLATION

1. ACCOUNTING
−  Law no.82/1991 on the accounting system
−  Government Ordinance no.75/1999 on the financial audit activity
−  Government Urgent Ordinance no.119/1999 on internal audit and preventive
   financial control

2. BANKING
−  Law no.58/1998 on the banking activity, amended by Government Urgent Ordinance
   no.24/1999
−  Law no.101/1998 on the Statute of the National Bank of Romania
−  Law no.83/1997 on the privatisation of banking corporations in which the state is
   shareholder, amended by Government Urgent Ordinance no.88/1997 on the
   privatisation of companies
−  Government Ordinance no.39/1996 on the establishment and operation of Banking
   Deposits Guarantee Fund, approved and amended by Law no.88/1997
−  Government Urgent Ordinance no.51/1998 on certain measures prior to the
   privatisation of banks
−  Government Decision no.387/1999 on the organisation and operation of the Agency
   for Banking Assets Recovery

3. BANKRUPTCY
−  Law no.64/1995 on the procedure of judicial reorganisation and bankruptcy (as
   modified by the Government Urgent Ordinance no.38/1996, Government Urgent
   Ordinance no.58/1997 and the Law no.99/1999 regarding certain measures for the
   acceleration of the economic reform)
−  Law no.83/1998 on the banking bankruptcy procedure

4. CAPITAL MARKETS
−  Law no.52/1994 on the securities and stock exchanges
−  Government Ordinance no.18/1993 regarding the over-the-counter transactions of
   securities and organisation of brokerage institutions
−  Government Ordinance no.24/1993 on the regulation for the establishment and
   operation of investment funds and investment trusts as financial intermediary
   institutions
−  Government Decision no.788/1993 for the approval of the Regulation on the public
   offer for securities sale and the Regulation on the authorisation of brokerage
   companies and securities agencies


5. COMPANY LAW
−  Company Law no.31/1990
−  Law no.15/1990 on the reorganisation of state-owned enterprises into autonomous
   administration and commercial companies
−  Law no.26/1990 on Register of Commerce
−  Decree-Law no.122/1990 on the authorisation and operation in Romania of the
   representative offices of foreign companies and corporations
−  Government Urgent Ordinance no.30/1997 on the reorganisation of autonomous
   administration
−  Law no.99/1999 on certain measures for accelerating the economic reform



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−   Decree-Law no.54/1990 regarding the organisation and development of economic
    activities based on free initiative (traders, natural persons, family associations)

6. COMMERCIAL ARBITRATION
−  Decree-Law no.139/1990
−  Civil Procedure Code (art.340-371)
−  Law no.105/1992 on the regulation of the private international law relationship

7. COMPETITION
−  Competition law no.21/1996
−  Unfair competition law no.11/1991
−  Law on state aid no.143/1999

8. CONCESSION
−  Law no.219/1999 on the regime of concessions

9. CONTRACTS
−  Civil Code and Commercial Code
−  Government Ordinance no.51/1997 on the leasing companies and leasing
   operations, as approved and amended by Law no.90/1998 as amended by law
   no.99/1999 (republished in 2000)
−  Government Ordinance no.52/1997 on the legal regime of franchising
−  Government Urgent Ordinance no.10/1997 on diminishing financial blocking and
   economic loss (factoring)

10. CUSTOMS
−   Law no.141/1997 on Customs Code
−   Customs Regulation approved by Government Decision no.626/1997
−   Order of the Ministry of Finance no.1090/1998 for the approval of the methodology
    regarding the exemption from the customs debt warranty

11. FOREIGN INVESTMENT
−   Law no. 35/1991 on foreign investment in Romania
−   Government Urgent Ordinance no.31/1997 on the regime of foreign investment in
    Romania
−   Government Urgent Ordinance no.92/1997 on the incentive of direct investment
−   Government Decision no.94/1998 for the approval of the methodological norms for
    enforcing Government Urgent Ordinance no. 92/1997
−   Law no.241/1998 for the approval of Government Urgent Ordinance no.92/1997
−   Government Ordinance no.66/1997 on foreign investment in Romania, achieved by
    purchase of state bonds as modified and completed by Government Ordinance
    no.131/1998

12. IMPORT AND EXPORT
−  Government decision no.215/1992 on the regime of export and import licenses
−  Order of the ministry of Industry and Trade no.13/1998 on the regime of export and
   import licenses for the goods and subject to license

13. INSURANCE
−   Law no.47/1991 on the establishment, organisation and operation of insurance
    companies
−   Law no.136/1995 on insurance and reinsurance in Romania


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14. INTELLECTUAL PROPERTY
−  Patent law no.64/1991
−  Law no.84/1998 on trademarks and geographical indication
−  Law no.8/1996 regarding copyrights and related rights
−  Law no.129/1992 regarding the protection of industrial models and drawings
−  Law no.16/1995 on the protection of integrated circuit designs
−  Government Ordinance no.41/1998 on taxation in the field of intellectual property
   protection and their use
−  Laws and Government Ordinances for ratification of some international agreements

15. LABOUR
−  The Labour Code
−  Law no.168/1999 on the settlement of collective labour conflicts
−  Law no.6/1992 on the holiday of the employees, legal leaves and other kind of
   leaves
−  Salary Law no.14/1991

16. REAL GUARANTEES
−  Civil Code
−  Commercial Code
−  Civil procedure Code
−  Law no.99/1999 regarding certain measures for the acceleration of the economic
   reform

17. SMALL AND MEDIUM ENTERPRISES AND SME AUTHORITY
−  Law no.133/1999 on Stimulation of SME’s
−  Government Decision no.975/1998 for the organisation and functioning of the
   Agency for Small and Medium Enterprises (with subsequent modification and
   completion)

Legislative documents issued in 2000 and 2001
     - Government Ordinance no. 64/2000 to ammend the Law 133 regarding the
         stimulation of the private entrepreneurs and for the establishment and the
         development of SMEs (suspended through the Emergency Ordinance no.
         295/2000).
     - Emergency Ordinance no. 297/2000 to ammend Law no. 133.
     - Government Decision no. 244/2001 to approve the Methodological Norms for
         the application of Law 133/199.
     - Government Decision no.272/2001 for updating the limits of contraventional
         fines forseen by the Law 133/1999.
     - Government Decision no.15/2001 regarding the organisation and functioning
         of the Ministry for SMEs and Co-operatives and Domestic Trade.


18. TAXATION
−  Government Ordinance no.70/1994 on the profit tax (with subsequent modification
   and completion inclusive G.U.O.no.217/1999)
−  Government Ordinance no.26/1995 on the dividends tax
−  Law no.34/1994 on agricultural income tax (republished)
−  Government Urgent Ordinance no.85/1997 on the personal income tax



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−   Government Ordinance no.24/1996 on the revenue tax of representative offices in
    Romania of foreign companies and economic entities
−   Government Ordinance no.83/1998 on the non – resident individuals and legal
    person income tax in Romania
−   Law no. 27/1994 on the local taxes and duties (republished in M.O.273/1998,
    modified by Government Urgent Ordinance no. 62/1998 and Government Urgent
    Ordinance no.15/1999)
−   Government Ordinance no.3/1992 on the value-added-tax (with subsequent
    modification and completion inclusive G.U.O.no.215/1999)
−   Government urgent Ordinance no.82/1997 on the excise regime and other indirect
    taxes
−   Law no.87/1994 on the prevention of tax evasion
−   Law no.141/1997 on the Romanian Customs Code
−   Government Ordinance no.15/1996 on the strengthening on financial and currency
    policy
−   Government Ordinance no.34/1995 on delay penalties
−   Government Ordinance no.13/1996 on the granting the facilities related to delay
    penalties
−   Law no.105/1997 on the settlement of objections, appeals and claims on the
    amounts ascertained and applied by control or taxation acts of the Ministry of
    finance as amended by the Government Ordinance no.13/1999
−   Government Ordinance no70/1997 on the fiscal control
−   Order no.1495/1997 of the Minister of Finance
−   Order no.1283/1998 on the proceeding and powers to grant payment facilities
−   Government Ordinance no. 73/1999 on the global income tax
−   Customs taxes: Government Ordinance no26/1993

OTHER
−  Law on public debt no.81/1999
- Law no. 189/1998 on Local Public Finance
−  Law no.72/1996 on Public Finance
Law no.69/1991 on Local Public Administration (with subsequent modification )




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                                LIST OF INFRASTRUCTURE PROJECTS FOR PHARE 2001 and 2002
                                                                                                                          Data: 18.09.2001
                                                                                                                             Phare
                                                                                                            Total cost
                        Project Title                          Beneficiary               Location                            contrib
                                                                                                            (mil. Euro)
                                                                                                                              (mil. Euro)
NORTH - EAST
1. Rehabilitation of the industrial area of Husi          Husi Local Council            Vaslui County            8.0                5
2. Business infrastructure development of Iasi airport    Iasi County Council            Iasi County            11.0                5
3. Rehabilitation of the Agapia Monastery tourist area    Agapia Monastery             Neamt County              4.5                3
4. Commercial area revitalization – “Botosani Ancient
                                                          Botosani Local Council      Botosani County             7                 5
Center”
5. Economical Center “Bucovina”, Suceava                  Suceava County Council      Suceava County            7.65                5
6. The development of business infrastructure by
modernization and rehabilitation of the Bacau             Bacau County Council         Bacau County              5.5               3.41
International airport

Total ADR 1 North - East                                                                                        43.65             26.41
SOUTH - EAST
1. Rehabilitation of water supply system in Tulcea city      Tulcea Town hall          Tulcea County            3.91                3
2. Re-technologisation of drinking water plant and
sewerage system in Posta and Mihai Viteazul districts      Buzau County Council        Buzau County              7.3                3
in Buzau municipality
3. Economical and environmental improvement of the
                                                             Panciu Town hall          Vrancea County           6.65                5
Panciu city



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Total ADR 2 South - East                                                                                           17.86               11

SOUTH – MUNTENIA
1. Improvement of the access to the Pan – European                                      DN 21 Calarasi-
                                                                      N.A.R.                                       10.8               5,0
Corridor IV                                                                             Slobozia
2. Development of the tourist area near Danube - Olt
                                                             Teleorman County Council Teleorman Council             6.5               5,0
River - Turnu-Magurele
3. Development of the tourist area Bratul Borcea -                                      Calarasi city ,
                                                             Calarasi County Council                                6.5               5,0
Calarasi                                                                                Bratul Borcea
4. Development of tourist potential in the mountain area Prahova and Brasov             Prahova and
                                                                                                                    11                 5
of Prahova County                                            County Councils            Brasov Counties
5. Modernisation of the thermic networks and thermic
                                                             Giurgiu County Council     Giurgiu County             2.95               2.35
points in Giurgiu municipality
                                                             Dambovita and Brasov       Dambovita and
6. Inter-county road in Bucegi mountains                                                                            6.5                5
                                                             County Councils            Brasov Counties
7. Rehabilitation of the tourist area Bradulet – Vidraru –
                                                             Arges County Council       Arges County                6.5                5
Balea Lac
8. Modernisation of the infrastructure and business
                                                             Ialomita County Council    Ialomita Cunty              6.5                5
incubator in the industrial area Urziceni

Total ADR3 South Muntenia                                                                                         57.25              37.35

SOUTH WEST OLTENIA
1. Water supply and sewerage system in Ocnele Mari           Valcea County Council        Valcea County            7.15                5


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Spa
2. Sustainable development of area Ilovita – Bahna –       Mehedinti County
                                                                                          Mehedinti County           6.5                5
Ciresu – Marga, Mehedinti                                  Council
                                                           Calafat Local Council /
3. Improvement of environmental conditions in Calafat                                        Dolj County             2.3               1.35
                                                           Dolj County Council
4. Development of the touristic region Gorj                Gorj County Council              Gorj County               5                 3
5. Restoration and conservation of Slatina historical
                                                           Slatina Local Council             Olt County             4.37                3
area

Total ADR 4 South – West Oltenia                                                                                    25.32             17.35

WEST ROMANIA
1. Environmental protection of the Surduc Lake Area –
Rehabilitation of the rural infrastructure and
                                                          Timis County Council             Timis County              4.25               2.8
introduction of the Surduc Lake Area in the
international tourist circuit
2. Improvement of drinking water supply and                                               Caras – Severin
                                                          Resita Local Council                                        7                  5
rehabilitation of the distribution network                                                    County
3. Modernization of the county road DJ 687D: Toplita      Hunedoara County
                                                                                        Hunedoara County             5.42               4
– Hasdau (km 14+8+0 – 22+870)                             Council
4. Modenisation of the county road DJ 792B km             Administration for
32+800 – 39+300, Moneasa village – Bihor county           Roads and Bridges of              Arad County              2.66                2
limit                                                     Arad County
5. Sewerage network for Bujac district of Arad city for   Arad City hall                    Arad County               5                3.75

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waste water and pluvial water
6. Rehabilitation of the DJ 592 Timisoara – Buzias –
                                                         Timis County Council            Timis County              8.25               5
Lugoj County Road
7. Modernisation of the county road DJ 666: Merisor –    Hunedoara County
                                                                                     Hunedoara County              3.32               2.5
Vulcan (km 11+000 – 14+000)                              Council
8. Modernization of the county road 571 between
                                                         Caras-Severin County
Moldova Noua and Sasca Montana (km 16+650 – km                                       Caras-severin County           7                 5
                                                         Council
28+800)

Total ADR 5 West Romania                                                                                           42.9             30.05

NORTH – WEST
                                                           Borş Local Council
1. Borş Industrial Park                                                                  Bihor County              3.7                2.4
                                                          Bihor County Council
2. Environmental rehabilitation of Prundu Bargaului      Prundul Bârgăului Local
area in order to ensure the conditions for its          Council - Bistriţa Năsăud        Bistrita County           6.5                5
development                                                  County Council
3. Marketing agro-food center in the light industry
                                                          Cluj County Council             Cluj County              6.5                 5
field
                                                          Borşa Local Council /
4. Development of the Borsa tourist area                                              Maramures County             6.25               5
                                                        Maramureş County Counci




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                                                           Negreşti Oaş Local
                                                                       Council /
5. Development of the touristical area Luna –
                                                                      Satu Mare         Satu Mare County            7.8                5
Negresti Oas, Satu Mare County
                                                                          County
                                                                          Council
6. Modernization and extension of the wastewater
treatment plant and of the sewerage network for the        Zalau Local Council             Salaj County             5.64              4.23
sustainability of Zalau Municipality

Total ADR 6 North – West                                                                                           36.39             26.63

CENTRAL
1. Rehabilitation of DJ 131 in order to improve the     Harghita/Brasov/Covasna        Harghita / Brasov /
                                                                                                                     7                 5
regional traffic                                        County Councils                Covasna Counties
2. Infrastructure development for the Industrial Park
                                                        Sibiu County Council              Sibiu County               6                 5
Sibiu – Sura Mica
3. Rehabilitation of the county road DJ 107M: Border
of the Cluj county – Rimetea – Coltesti – Valisoara –
Poiana Aiudului – Aiudul de Sus ( DJ 107I) km
                                                        Alba County Council               Alba County               3.2                3
42+000 – km 67+000 in order to allow capitalization
of the economic and tourist potential of the Aiud
Valley
4. Modernisaton of DN 1A (170+000 – 177+600) –          National Administration
                                                                                         Brasov County              6.5                5
Sacele by-pass                                          of Roads


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5. Development of the touristic area Medias –            National Administration
                                                                                         Sibiu County              7.5                5
Tarnaveni – Iernut (DN 14A km 2+850 – 20+400)            of Roads
                                            Total ADR 7 Central                                                    30.2               23

INTER-REGIONAL PROJECTS
                                                         Romanian Energy
1. Development of heating systems based on the use       Conservation Agency        RDA North-East, North
                                                                                                                  13.13               5
of bio-mass in five touristic areas                      (in co-operation with           West, Central
                                                         DEPA)
                                       Total Inter-regional projects                                              13.13               5

BUCURESTI - ILFOV
1. Improving the infrastructure for socio-economic
development of the northern sub-urban area of              Bucharest City hall             Bucharest                20                5
Bucharest
2. Environmental rehabilitation of Snagov lake              Snagov City hall              Ilfov County              8                 5
3. Technological park in the fields of electronics,
software and electro-techniques for the Bucharest-         Bucharest City hall             Bucharest                15                5
Ilfov region
4. Fitting out the central historic area including the
                                                           Bucharest City hall      Bucharest                       10                5
pedestrian area
5. Rehabilitation of water supply and sewerage
                                                             Glina City hall        Bucharest                      3.5                3.1
systems in Glina



                                                                        138
                                              Annex 6: Large scale infrastructure portofolio of projects
                                                                                             RO0108.03

        Total ADR 8 Bucuresti - Ilfov                                         56.5              23.1


TOTAL INFRASTRCTURE PROJECTS PHARE 2001                                      323.2             199.89




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