TERMS OF REFERENCE
Technical assistance to sector working groups to coordinate sector reform cycle and develop national sector programmes
1. BACKGROUND INFORMATION 4
1.1. Partner country 4
1.2. Contracting Authority 4
1.3. Country background 4
1.4. Current situation in the sector 5
1.5. Related programmes and other donor activities 10
2. OBJECTIVE, PURPOSE & EXPECTED RESULTS 10
2.1. Overall objective 12
2.2. Purpose 12
2.3. Results to be achieved by the Contractor 12
3. ASSUMPTIONS & RISKS 13
3.1. Assumptions underlying the project 13
3.2. Risks 14
4. SCOPE OF THE WORK 14
4.1. General 14
4.2. Specific work 16
4.3. Project management 22
5. LOGISTICS AND TIMING 23
5.1. Location 23
5.2. Start date & period of implementation 23
6. REQUIREMENTS 23
6.1. Staff 23
6.2. Office accommodation 27
6.3. Facilities to be provided by the Contractor 27
6.4. Equipment 28
6.5. Incidental expenditure 28
6.6. Lump sums 29
6.7. Expenditure verification 29
7. REPORTS 29
7.1. Reporting requirements 29
7.2. Submission & approval of reports 30
8. MONITORING AND EVALUATION 30
8.1. Definition of indicators 30
8.2. Special requirements 31
Acronyms
DDFFA Department for Development Financing and Foreign Aid
DCM Decision of the Council of Ministers
EC European Commission
EU European Union
IMF International Monetary Fund
IPA Instrument for Pre-Accession
IPMG Integrated Policy Management Groups
IPS Integrated Planning System
MTBP Medium Term Budgeting Program
MEI Ministry of European Integration
MoF Ministry of Finance
MIPA Minister of State for Innovation and Public Administration
NPEI National Plan for European Integration
NIC Natioanl Investment Committee
NIPAC National IPA Coordinator
NSDI National Strategy for Development and Integration
PAR Public Administration Reform
PPF Project Preparation Facility
PIF Project Identification Forms
PIP Public Investment Program
PMO Prime Minister's Office
SA Sector Approach
SAA Stabilization and Association Agreement
SEE South East Europe
SPC Strategic Planning Committee
SPP Single Project Pipeline
SWG Sector Working Groups
WBIF Western Balkans Investment Fund
1. BACKGROUND INFORMATION
1.1. Partner country
Republic of Albania
1.2. Contracting Authority
The General Directorate for Financing and Contracting of EU, World Bank and Other Donor Funds/Central Finance and Contracting Unit (CFCU) within the Ministry of Finance of the Republic of Albania
1.3. Country background
In 2003, the Thessaloniki European Council confirmed that the future of the Western Balkans, including Albania, is within the European Union. Since 2004, Albania participates in the Western Balkans Stabilisation and Association Process and concluded the Stabilisation and Association Agreement (SAA) with the EU in 2006. The SAA entered into force on 1 April 2009 and in the same year Albania applied for EU membership. Following a request by the Council, the Commission submitted its Opinion on Albania's application in November 2010. Visa liberalisation for citizens of Albania travelling to the Schengen area is in force since December 2010. In view of the progress made since then by Albania, in October 2013 the Commission recommended that the Council should grant Albania the status of a candidate country on the understanding that Albania would continue to take action in the fight against organised crime and corruption. In June 2014, the European Council granted candidate status to Albania.
In order to open the accession negotiations, the Commission requires that Albania would need to meet key priorities related to public administration and judicial reform (with a focus on professionalism and de-politicisation), fight against corruption and organised crime and reinforcement of protection of human rights, including property rights (EU Enlargement Strategy and Main Challenges 2013-2014). The European Parliament in its 2013 Resolution on the Albania 2013 progress report also urged these priorities to be addressed and to consolidate the progress. The Enlargement Strategy Paper 2013-2014 indicates 5 key priorities as prerequisites to the launch of accession negotiations:
1. continue to implement public administration reform with a view to enhancing professionalism and depolitisation of the public administration;
2. take further action to reinforce the independence, efficiency and accountability of judicial institutions;
3. make further determined efforts in the fight against corruption, including towards establishing a solid track record of proactive investigations, prosecutions and convictions;
4. make further determined efforts in the fight against organised crime, including towards establishing a solid track record of proactive investigations, prosecutions and convictions;
5. take effective measures to reinforce the protection of human rights, including of Roma, and anti-discrimination policies, as well as implement property rights.
In view of these priorities and the High Level Dialogue (HLD) for the Key Priorities between Albania and the European Commission[1], the Government decided to develop a Road Map in the framework of implementation of the reforms for the 5 key priorities, which was adopted in April 2014.
On 24 June 2014, at the General Affairs Council meeting in Luxembourg, Ministers from the EU Member States agreed to grant EU candidate status to Albania, which was later confirmed by EU heads of states at the European Council on Friday 27 June 2014 in Brussels.
Albania adopted the National Plan for European Integration 2016-2020 (NPEI) in January 2016. By adopting the NPEI, Albania now has a medium-term plan that fits its new stage in the integration process. The NPEI is primarily based on the screening of integration tasks and provides a prioritised plan for the medium term. Its monitoring process has started to function.
The Government of Albania has approved in May 2016[2] the National Strategy for Development and Integration (NSDI) for the period 2015-2020. The NSDI provides the strategic framework for all sector and cross-sector strategies and is the backbone of the Integrated Planning System (IPS) – a set of operating principles to ensure that government policy planning, budgeting and monitoring are linked and operate efficiently. The NSDI guides the Medium-Term Budget Programme (MTBP), as well as annual budget allocations, by providing policy objectives which are included in the Ministry of Finance's instructions for the budget preparation by all Ministries and agencies. Major part of sector strategies have been drafted, however, some heavy public investments sector strategies are being drafted and are expected to be finalised within 2016. The Government of Albania has also defined the Government's six key policy priorities and has started its work in monitoring them. Albania's national plans are envisaged to be aligned with several regional integration initiatives. This includes the commitment to the regional South East Europe (SEE) 2020 growth targets.
Despite the progress made so far, there is a need for further consolidation and improvements. In particular, there is a need to further strengthen economic growth and reduce public debt. In terms of public financial management, there is a need to further improve revenue forecasts, internal controls, and expenditure management. Albania is committed and has started to address outstanding issues in the context of the respective IMF and World Bank agreements in early 2014. Albania remains committed to its EU integration ambitions that it will continue implementing relevant reforms and that the process will continue in the period 2014-2020, including the starting of accession negotiations once the country has achieved the necessary degree of compliance with the membership criteria.
1.4. Current situation in the sector
The Commission has provided substantial financial support to Albania since 1999. Under the Instrument for Pre-Accession (IPA), Albania has received around €500 million for national programs over the period 2007-2013. Key priorities include the strengthening of administrative capacity at all levels, enhancing the rule of law, human rights and good governance, improving socio-economic conditions for all communities, and developing regional cooperation. A follow up programme, the IPA II, has been recently approved and covers the period 2014 to 2020, including the strategic framework of future assistance.
The positive response on Albania’s candidacy for membership in the European Union has led the country into a new phase for negotiation preparations, which will require further support for the European integration process. There is need to further increase knowledge of Albania's integration process and its implications in becoming an EU Member State, particularly among key target groups and to increase general understanding of the EU policies and programmes among the population at large including the close involvement and dialogue with the civil society. Therefore further assistance is required to support EU Acquis alignment and further develop mechanisms and tools for improving organisational structure, efficiency and effectiveness of government authorities through changes and amendments of existing legislation as well as through their implementation.
The progress report 2015 quoted: “The government has maintained its focus on addressing the key priorities for the opening of accession negotiations, pursuing a set of reforms necessary to advance in the EU integration path. Some progress has been made at local government level with the start of implementation of the territorial administrative reform and the adoption of the decentralisation strategy.
However, substantial efforts are needed to clarify the functions and responsibilities of the newly created local government units and to increase their financial and administrative capacity.”.
The Instrument for Pre-accession Assistance (IPA II) is the main financial instrument to provide EU support to the beneficiaries in implementing reforms with a view to Union Membership. The Indicative Strategy Paper for Albania 2014-2020 (the Strategy Paper) sets out the priorities for EU financial assistance under IPA II for the period 2014-2020 to support Albania on its path to accession. It translates the political priorities set out in the enlargement policy framework into key areas where financial assistance is most useful to meet the accession criteria. Financial assistance under IPA II pursues the following four specific objectives: (a) support for political reforms, (b) support for economic, social and territorial development, (c) strengthening the ability of the beneficiaries to fulfil the obligations stemming from Union membership by supporting progressive alignment with, implementation and adoption of, the Union acquis, (d) strengthening regional integration and territorial cooperation.
Furthermore, the IPA II Regulation states that financial assistance shall mainly address five policy areas: a) reforms in preparation for Union membership and related institution-and capacity-building, b) socio-economic and regional development, c) employment, social policies, education, promotion of gender equality, and human resources development, d) agriculture and rural development, and e) regional and territorial cooperation.
Under IPA II, the IPA 2014 national programme for Albania was approved in early 2015 by the IPA II Committee, and programming for IPA 2015 and IPA 2016 is currently under preparation.
IPA II is based on the Sector Approach (SA) defined as a process which aims to broaden government and national ownership over public sector policy and decisions on resource allocation within the sector, thereby increasing the coherence between sector policy, government spending and the achievement of results. The Sector Approach has the following features: (a) Ownership with respect to existing national development strategy and policy framework; (b) a single comprehensive budget framework, (c) functional donor coordination with harmonised reporting and monitoring procedures. As compared to IPA I, the new IPA II will strengthen the intervention logic, ownership and impact by focussing assistance on the achievement of national sector policy objectives and results.
A functioning sector approach requires the existence of government policies and strategies, medium term budget frameworks, coordination, and monitoring of results and performance assessments. Albania is well positioned to meet these criteria and the Department for Development, Financing and Foreign Aid (DDFFA) at the Prime Minister’s Office is the main responsible for, developing the NSDI 2015-2020, as a single overarching strategic document for the country, and to support policy development, analysis, planning, reporting, monitoring and evaluation, in a consultative process the related sector strategies, within the Albanian Integrated Planning System IPS. The strategies will be complemented by the Medium-Term Budget Plan (MTBP) which outlines the financial framework for the implementation of the sector strategies. Donor coordination is in place through sector working groups coordinated directly by the Department for Development, Financing and Foreign Aid (DDFFA) at the Prime Minister’s Office. Monitoring and performance assessments are being improved by efforts to strengthen the monitoring and the activities of sector working groups which will also consider the dialogue on the performance and achievements in the respective sectors.
Albania is eligible for Sector Budget Support, provided that the following four pre-conditions are met: a stable macro-economic framework; a credible and relevant programme to improve public financial management; transparency and oversight of budget; and credible and relevant sector strategies that are consistent with the EU accession strategy.
Albania is well placed to meet these conditions for the following reasons:
1. The macro-economic situation is overall stable and has improved in recent years;
2. With respect to public financial management, the preparation of a credible reform programme was completed by end-2014;
3. In terms of the transparency of the budget, the medium term budget plan is part of the documentation tabled to Parliament which ensures oversight of the budget, updates to the legislation regarding the functioning of a state audit institution were in place by end-2014;
4. National/Sector Policies and strategies are either in place or are being developed in line with the development of the NSDI mentioned above in section 1.3.
Under IPA 2014, Albania has been considered eligible for sector budget support in Public Finance Management, and under IPA 2015 two other sectors, namely Public Administration Reform and Employment are currently considered for further budget support. Furthermore, under IPA 2016 additional sectors are under consideration to be possibly funded through sector budget support: Justice, Transport and Water.
The conditions for Indirect Management of funds (formerly decentralised implementation system - DIS) are in principle in place. In 2014, the Commission adopted a decision regarding the conferral of management of EU funds to the Albanian authorities for component 1 of IPA I, i.e. Transitional Assistance and Institution Building.
With regard to IPA 2014 National Programme, an EC Audit Verification Mission was carried out to verify the readiness of Albanian authorities for entrustment of budget implementation tasks under IPA II/IPA 2014. The Financing Agreement for IPA 2014 between the Government of Albania and European Commission was signed on December 11th 2015.