Obtaining EU funding for a greenfield
project in Southern Romania
voestalpine Steel Service Center Romania SRL
From submission through to evaluation and implementation ...
MMag. Stefan Einfalt, June 18th, 2012, AWO-Forum
Steel Division - voestalpine Steel Service Center Romania SRL
voestalpine Group
Overview
� voestalpine is a globally active Group with a number of specialized and
flexible companies that produce, process and further develop high-quality
steel products. The Group is represented by approximately 360 production
and sales companies in more than 60 countries.
� With its highest quality flat steel products, voestalpine is one of Europe’s
leading partners to the automotive, energy, white goods and consumer goods
industries. Furthermore, voestalpine is the world market leader in turnout
technology, tool steel, and special sections, as well as number one in Europe
in the production of special rails.
� The four divisions of the Group each occupy leading positions in their
respective core segments.
� The voestalpine Group generated revenues of EUR 12.1 billion in the
business year 2011/12 and has 46,500 employees worldwide.
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Steel Division - voestalpine Steel Service Center Romania SRL
voestalpine Group
Leading Position in the Core Segments
Steel Special Steel Metal Engineering Profilform Automotive
Top European player Global leadership Global leadership Global leadership Top European player
Top-three European
supplier of high quality
sheet and global top
position in heavy plate
for the most demanding
applications.
Worldwide leader
in tool steel.
Leading position in
high-speed steel
and special forgings.
European market leader
for rails and processed wire,
world market leader for
turnouts and complete railway
systems; leading position in
welding consumables and
seamless tubes.
Worldwide market leader
in special sections and
custom roll forming;
leading position
in precision strip.
Top-three European
player in the automotive
supply industry for
special components.
as of April 1, 2012
Metal Forming
Global leadership
Leading worldwide provider of high-quality metal
processing solutions, in particular special sections
and precision steel coil as well as special
components for the automobile industry.
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Steel Division - voestalpine Steel Service Center Romania SRL
Steel Division - voestalpine Steel Service Center Romania SRL
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voestalpine Steel Service Center Group
Exactly tailored to your needs
The network of competence
for high-precision
� slit strip
� cut sheets
� cut shapes
made of high-quality
hot-rolled, cold-rolled
and surface-finished
thin sheets.
MMag. Einfalt Stefan - Vortrag AWO Forum 18.06.2012
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voestalpine Steel Service Center Group
Always close to you
Production locations
� Linz, Austria
� Tychy, Poland
� Giurgiu, Romania
Holdings
� Cittadella, Italy
� Stuttgart, Germany
Sales offices
� 23 locations in 21 countries(voestalpine Eurostahl)
MMag. Einfalt Stefan - Vortrag AWO Forum 18.06.2012
Greenfield project
voestalpine Steel Service Center Romania SRL …
To construct a voestalpine Steel Service Center at the site in Giurgiu,
Romania
Steel Division - voestalpine Steel Service Center Romania SRL
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The site in Giurgiu
Location selected - Giurgiu, Romania
� Size of site, approx. 4.0 hectares
� Direct rail link
� Connection to the river Danube
� Centrally located between core markets
Steel Division - voestalpine Steel Service Center Romania SRL
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Design for manufacturing halls and offices
Hall 1 gross size 4787 m2 VM 3190 m2
FM 1590 m2
Hall 2 gross size 3797 m2 PR 2480 m2
FM 1324 m2
Total 8584 m2
Steel Division - voestalpine Steel Service Center Romania SRL
5 stages of the subsidy process … a single structure
� 1. Claiming
� 2. Preparation
� 3. Evaluation
� 4. Tendering
� 5. Reimbursement Preparation
The
"Lessons Learned"
outlined below in relation to the
application by voestalpine Steel Service Center Romania SRL …
have been structured in a manner that complies with the phases described.
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Stage 1: "Claiming" - Lessons Learned
� In cooperation with the Management Authorities, voestalpine Steel Service Center Romania SRL submitted several claims, in order to bring about improvements in relation to unclear points in the guidelines.
� As a result of this, the funding authorities carried out appropriatechanges with regard to all of the points in question ...
� When submitting applications for funding, you should not passivelyaccept any criteria or requirements that are incomprehensible orillogical. Instead, you should formulate explanations and suggestedimprovements based upon facts and documentary evidence.
� You have the power to help to shape the guidelines!
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Stage 2: "Preparation"
� The following documents must be submitted with the application or must beshown prior to the signing of the financing agreement:
1. Legal acts
Articles of Association
Extract from the Commercial Register
Certificate of inclusion in the Commercial Register
Declaration confirming that the company is categorized as
either a large, medium-sized or small enterprise in the sense
of Annex 1 of the Registration Act 27/2006
Proof of entry in the register of associations and foundations /
certificate of incorporation
Deed of compliance relating to the incorporation of companies
using state capital
2. Financial acts
Official balance sheets from the past 2 years, including profit
and loss account for the applicant and the partners
3. Other certificates
Confirmation that the applicant is not in debt to the state
Extract from the tax register relating to the applicant's legal
and technical representative
4. Documents that certify the applicants contribution to
the project
Investment authorization from the Supervisory Board
Extract from the Land Registry relating to the site
Confirmation on the company's own liability that the site is not
the subject of a dispute.
Confirmation of credit rating from the bank in the event that a
loan is involved
Approval of finance from the company's banks
Declaration by the partners relating to their shareholding as
stated in the application for finance / consent of the partners,
50% of the investment amount for the duration of the project
and an additional 15% for the following 3 years
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Stage 2: "Preparation"
� The following documents must be submitted with the application or must be
shown prior to the signing of the financing agreement:
5. Other documents
Map of the project location
Environmental permit, environmental impact assessment
Building permit and other permits relating to the site and construction
Ownership of the site, including an independent estimation of the value of the site
Eligibility declaration: Confirmation that the company is not undergoing restructuring and is not
subject to equalization or insolvency proceedings
A statement to the effect that no state subsidies have been received during the last 10 years in
respect of buildings and in the last 6 years in relation to sites
Business plan
Feasibility study
Technical project description drawn up by a certified planning consultant
Cost-benefit analysis, including cash flow
CVs of all individuals that form part of the project team
Other documentation (market study), if requested by the funding authority
MMag. Einfalt Stefan - Vortrag AWO Forum 18.06.2012
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Stage 2: "Preparation" – Lessons Learned
Scope of documents to be submitted
voestalpine Steel Service
Center Romania SRL
around 400 pages of DIN
A4 paper
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Stage 3: "Evaluation" – 3 steps …
Administrative
Approval
Eligibility
Approval
Final
Assessment
1
2
3� Was the application
submitted on time?
� Are the documentscomplete and in the
correct form?
(Financing application,
Declaration of Eligibility
Declaration of Commitment,
Feasibility, CBA, …)
Evaluation carriedout by the localauthority itself ...
� Is the right project being
submitted under the
right program?
� Do the objective and
proposal correspond to the program guidelines?
Evaluation carriedout by the localauthority itself ...
� Evaluation will take placein accordance with the
list of criteria
Evaluation carried out by an independent evaluator ...
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Stage 3: "Evaluation" - Criteria
� The final evaluation will be based on a publicly-available set of criteria. The points awarded to specific aspects of an application are also in thepublic domain.
� On a basic level, the criteria each come under one of the following fiveheadings:
� Consistency with the objectives of SOP IEC
� Quality and Coherence
� Maturity
� Sustainability
� The beneficiaries' capability to implement the project
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Stage 3: "Evaluation" – Lessons Learned
� You must adhere strictly and precisely to
ALL of your obligations in terms of information and publicity
� Sample documents can be found in the
"Visual Identity Manual“
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Stage 4: "Tendering" - Principles
� Throughout the entire purchasing process, the following principles must be
observed for every decision:
� Non-discrimination and equal treatment
(Creation of the right conditions for genuine competition )
� Mutual recognition
(Acceptance of products, services and work legally available on the market in the European Union)
� Transparency
(Publication of all information relating to the implementation of the process of awarding the contract)
� Proportionality
(Ensuring that the needs of the beneficiary, the purpose of the contract and the requirements to befulfilled are in agreement with each other.)
� Efficient use of public funds
(Optimum balance to be achieved between quality and price.)
� Assuming responsibility
(Definition of the duties and responsibilities of those involved in the purchasing process ).
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Stage 4: "Tendering" - Stage model
Stage Content
1 Planning of purchasing - Establishing requirements
- Estimating the value
- Selection of the procedure (in accordance with OUG 34/2006/instructions)
2 Drafting of the documentsfor awarding of thecontract
- Drafting the functional specifications
- Specification of contractual clauses
- Specification of minimum requirements with regard to suitability and selection (optional)
- Specification of criteria for awarding the contract
- Rules relating to participation and the avoidance of conflicts of interest
3 Announcement/invitationto tender
- Drafting and publication of the announcement regarding participation in a local/national newspaper
- Drafting and sending of the invitation to tender to at least 3 potential providers
- Provision of documents relating to the awarding of the contract
- Responding to requests for clarification
4 Implementation of theprocess
- Receipt and registration of bids
- Opening of bids
- Assessment of bids
- Drawing up report on the assessment of the bids and decision on awarding of the contract
5 Awarding of the contract - Communication of the results of the process to the bidders
- Publication of the announcement regarding the awarding of the contract in a local/national newspaper
- Signing of the contract
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Stage 5: "Reimbursements”
� Optimum preparation of the "reimbursement claims" constitutes a keyfactor in success for the entire sub-project "Subsidies":
� Only in connection with reimbursement claims is compliance with all
guidelines described in "Stage 4: Tendering" monitored.
� Only in connection with reimbursement claims does the authority check that
contracts have been concluded correctly with suppliers, that the client is
correctly invoiced for products and services, that all proof of progress with
construction is provided correctly and that the subsidized capital goods have
been dealt with correctly from an accounting viewpoint.
� This all takes place as part of the obligatory submission of the "tender file" for all
contracts awarded for which payments are requested in reimbursement claims.
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� The tender file must include the following documents:
� Justification regarding the determination of the estimated value;
� Contract notice;
� Invitations;
� Proof that the contract notice has been transmitted to a local/national newspaper in
order to be published;
� Proof that the invitations have been transmitted to at least three potential bidders;
� Tender documentation;
� Offers submitted to the Company and the bidders’ affidavits regarding the situations
listed under item 3 above, in original;
� Requests for clarifications + issued clarifications;
� Evaluation and award minutes;
� Proof that the tender result has been communicated to the bidders;
� Proof that the tender result has been published in a local/national newspaper;
� Awarded contract.
Stage 5: "Reimbursements”
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� The following must now also be provided:
� The application for reimbursement
� The progress report
� Certified copies of the following documents marked "conforms to the original", with the
stamp of the beneficiary and the signature of the legal representative:
� Invoices (with detailed description of the product purchased, the service
provided or the work carried out),
� Payment documents, bank returns, other supporting documents or accounting
documents,
� Audited accounts, analytical account forms showing the registration of primary
documents in the accounts;
� For information and advertising: photographs, notices, announcements, documents
showing proof of payment for radio and television advertising
Stage 5: "Reimbursements”
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Monitoring is carried out primarily on the basis of the following indicators:
� Tangible and intangible capital goods purchased
� Developed land
� Amount of financing from own funds (= total - subsidy)
� Increase in sales after implementation of project
� Jobs created and preserved
� Increase in proportion of exports
Monitoring stage - indicators
� The success of the implementation of a project that has been submittedis monitored immediately after completion of the project and over a period of 5 years after completion of the project.
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Lessons learned – A brief summary
� Carry out a self-assessment with regard to the known evaluation catalogbased on an existing business plan. Pay particular attention to K.O. criteriafor submission.
� Aim to play a part in designing the guidelines by submitting claims.
� Find a competent consultancy with experience in dealing with the localauthorities. It is often impossible to overcome a language barrier withoutmassive losses.
� Find a competent law firm with experience in carrying out public tenderprocedures to support you.
� Ensure that the project team that is to prepare the documents forsubmission includes both technical experts and financial experts - involvethe consultant who is to be responsible for contact with the authorities in ALL preparatory measures for the documents to be submitted.
� Be aware that considerable delays can occur in relation to the timelinesoriginally published by the authorities and allow for this possibility. Workmust not begin on the project before a decision has been reached on subsidies!
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Thank you for your attention!
MMag. Einfalt Stefan - Vortrag AWO Forum 18.06.2012