Trainings
Effective Project Management in the Water Sector in
Georgia:
Implementation
of the EU and EBRD Methodologies
Date: September 7, 2016 Tbilisi, September 9, 2016 Batumi
Place:
Tbilisi: Hotel Ambasadori, Ioane Shavteli
Turn, Tbilisi, Georgia, 15 participants
Batumi: Hotel Era Palace, 77 Zurab Gorgiladze St, Batumi, Georgia, 16 participants
Organizers: NISPAcee and NALAG
Donor: SlovakAid
Training Objectives
The training is organized within the project implemented by NISPAcee and
NALAG under the support of SlovakAid. The project utilizes the Slovak
experience in the implementation of projects in the water sector, financed by
the EU and EBRD funds. The objective is to train the participants in the
utilization of manuals developed under the project and train trainers who could
lead further similar trainings.
Target Group
On trainings took part representatives from Consulting
Engineers, Contractors, Funding Agencies, Employers, Insurers, local Experts, Officials, Design
Engineers and Operators of Waste Water Treatment Plants, local Governments,
Ministries, NGOs, Manufacturing Organisations,representatives of the EU, EBOR and other donor organizations, as well as representatives from the Legal and
other Construction Professions.
Duration
1 day
Language and translations
All materials
were developed in English language. During the training English
- Georgian interpretation was provided.
Topics of Training
1. Explanation of the Project Manuals and how to work
with them.
2. Introduction to the FIDIC contracting procedures.
3. Environmental Impact Assessment.
4. Public Procurement Legislation.
1.Explanation of the Project Manuals and how to work
with them
The Guidelines offers information related to the Tendering Procedures, its
implementation in practice, issues and cases faced during daily work, as well
as solutions or opportunities to find such solutions. The Guidelines describes the tendering and
contractual environment and covers the most common forms of tendering and
contractual procedures will be used on infrastructure projects in Georgia.
2.
Introduction to the FIDIC contracting procedures
The FIDIC Contracts Module has been designed to be highly practical to offer a
complete up-to-date review of the effective understanding and use of the FIDIC
Contracts currently in use. Primarily an overview of the FIDIC Contracts and forms were presented, focusing on the allocation of functions, particularly design
and the allocation of risks.
3.
Environmental Impact Assessment
This
part of the training describes EIA procedures and compares the practice in Europe under existing European Law and
experience from EC practice.
4. Public Procurement Legislation
Comparing principles of PP Law in Slovakia, EU and Georgia was very
useful also due to fact that country started with pre-accession dialogues with
EU.
Profile of Trainers
Mr. Milan
Oleriny is the Main Expert for this project. He is an acknowledged expert in FIDIC contracts
and an esteemed published author in the field of International Construction
Law, Tendering Procedures, Public Procurement Procedures,
Contracts, Pricing and Claim Management.
Mr. Oleriny lectures and
tutors FIDIC courses in the Czech and Slovak Republics acting as a Procurement
Expert, specializing in construction projects and water/wastewater projects. He
has over 15 years’ professional experience in water and wastewater projects in
Central and Eastern Europe, the CIS and Balkan countries. Thanks to his good knowledge of both
English and the Russian language he provides services in multicultural surroundings
all over the World. As an Expert and Author of 5 books, he has experience with
EU-based Infrastructure Projects (Water, FS, and WWTP) for Tendering Documents,
and Contract and Evaluation Procedures as well as experience with PRAG
Conditions for EU-based Projects under the FIDIC P&DB and FIDIC RB
Conditions.
Mr. Boris Balogh is a legal expert. Within the project he utilizes his expertise in the approximation
of EU legislation and especially in the comparison of the new EU directives in
the field of EIA and Public Procurement and requirements on their
implementation in the Georgian national legislation. He has obtained his
knowledge and experience during his work as the Director of the Legal
Department at the Slovak National Council and also at the Ministry of
Environment and, at present, at the Ministry of Economy of the Slovak Republic.
Foreword
Georgia is
in a critical state in the cleanliness of waste water and the building of
waste, with a poor infrastructure and very low level of management. It is vital
that the water sector increases its utilisation of foreign investments, EU and
EBRD funds and the application of their methodologies in the planning and
management of projects.
This is
crucial for the improvement of the current situation and the implementation of
EU directives and requirements in the water sector to improve the living
conditions of the population in Georgia.
Improving
water protection, and water and waste management is one of the main priorities
of the country, due to the current critical situation in this sector. In
addition, an Association Agreement has been signed with the EU. This critical
situation has been confirmed via information from the Ministry of Regional
Development and Infrastructure of Georgia, the Ministry of Environment and the
Georgian project partner NALAG.
The
effective management of water sector projects in Georgia, based on the EU and
EBRD methodologies, is therefore the main objective of the project developed
by NISPAcee.
Guidelines and Public Procurement in Georgia
The Guidelines and Methodology ("The Guidelines”) prepared by
NISPAcee are intended to assist Contracting Authorities in the country to prepare responsive Tender Documentsin conformity with Standard Documents used for EBRD projects, as well as for EU
co-financed projects. Guidelines describe minimum
standards of acceptable practice for public infrastructure construction
projects in Georgia.
The Guidelines offer information related to the Tendering Procedures, its
implementation in practice, issues and cases faced during daily work, as well
as solutions or opportunities to find such solutions. The Guidelines describe the tendering and contractual environment and
cover the most common forms of tendering, and contractual procedures will be
used on infrastructure projects in the country. However, this will not cover
the essential background tax information, local Laws and related specific
conditions in the country and the impact of any legislation.
The provisions of the
Guidelines should be observed by all parties involved in public infrastructure
construction. The Tender Procedures and Contract Management processes should be
structured to minimise the costs for all parties, including operators,
consistent with the standards of behaviour required by these Guidelines.
Public Procurement and Tendering Procedures are a relatively new area in
Georgia and, usually, the information in this area is obtained through
non-professional channels. The Guidelines also serve groups that are not involved on a daily basis in Public
Procurement, but still need to
receive professional information in this area.
Objectives of the Guidelines
The document is primarily intended for Public Procurement
practitioners, providing them with a suitable tool to ensure an efficient
and consistent practice of the Public Procurement procedures. The Guidelines
will also serve as training material in the context of procurement training
activities for strengthening knowledge of Staff, associated with Public
Procurement procedures.
The Guidelines establish high and significant
benchmarks and encourage high ethical standards for theUnited Water Supply Company of Georgia, managed
construction projects in order to achieve better Procurement Practices, higher
productivity, high-quality construction works, better working conditions and
the avoidance of malpractice, with significant benefits to the entire
Contracting Authority. All other entities and local municipalities are therefore encouraged to
apply the principles outlined in these Guidelines taking specific conditions of
their project into consideration.
Although the Guidelines
primarily address standard methods of procurement and delivery, they also seek
to actively encourage innovation, especially regarding Contract Management due
to changes in local Laws, especially in Public Procurement Law and Decrees. The
parties to these Guidelines recognise that a high standard of performance can
be achieved by encouraging innovation and co-operative practices, which lead to
better quality projects, lower costs over the life of the infrastructure and
better value for money.
It should be appreciated that
the Guidelines are an attempt to bring to the attention of public entities,
important provisions in Tendering Documents. However, it is our expectation
that by reading these Guidelines, public entities will find it easy to
understand the relevant Tender Documents, also for specific requirements in the
construction infrastructure projects in which they are participating.
However, in some cases, it
might be confusing for practitioners who have experience from previous projects
based on Georgian Public Procurement Law in some wording (Employer/Contracting
Authority etc.); consequently the glossary from EBRD and/or EU shall be taken
and used.
To increase the uptake of
investments and behaviour in the industry and construction generally, public
policies are necessary to eliminate the
barriers that discourage stakeholders from pursuing projects, also in the water
sector. Beyond the removal of barriers, proactive instruments are imperative to
enhance users’ motivation and incentives to adopt more efficient technologies
and practices.
Description of the
barriers to the implementation of water projects
Though the policy barriers to implement
experienced and recognized practices in industry projects, as well as in public
buildings, have largely been dismantled, there are still significant barriers
that exist to the implementation of existing and/or future investment projects. The ability to increase the
market for water projects and services is still limited significantly by the
barriers described below.
These barriers can
be divided into three main groups:
1. Institutional, legal and regulatory barriers
One of the areas
where the implementation of methodology is complicated is related to the legal
and contractual framework in which developers of water projects operate.
2. Information and technology
barriers to implementation
In addition to
legal and contractual issues, there are also barriers related to the lack of
financial and technical capacity within the potential service providers
(Designers, Engineers) and construction companies. These hinder investment,
which results in a lack of prepared projects in the water sector being taken up
and services and/or works provided.
3. Economic and financial
barriers to implementation
While the barriers
outlined above are specific to many municipalities, there are also two primary
barriers to the nationwide uptake
of the measures in the water sector and projects.
Removing the barriers on the market
Outcomes which would indicate
these barriers have been overcome
Following on from the analysis
of the barriers to the implementation of practicable Methodology for the preparation
and evaluation of projects in the water sector, it is possible to draft outcomes
that would demonstrate that the project has overcome these barriers. From
there, it is then possible to outline the outputs and activities that would
lead to the outcomes.
The table below outlines the
barriers that this project plans to overcome and the outcomes that will
demonstrate that progress has been made in creating a market with
implementation for water projects in Georgia.
Tender Documents are the written details of the goods and servicesrequired and should include a copy of the proposed contract between the CA and
the Contractor. Tender documents should specify the CA requirements clearly and
indicate the criteria for evaluation, including the weighting given to each
evaluation criteria. All parties should have regard to the costs of tendering
to the industry and the community at large, and avoid calling repeated rounds
of tendering.
The tender documentation
should specify the timelines for the acceptance of Tenders and notification of the
successful Tenderer. Where these timelines are to be altered, the Tenderers
should be notified accordingly. If there are to be significant delays then
Tenderers are to be given the opportunity to vary their tender.
Standard Tender Documents and their role in Variation
Order Procedure
How can we avoid
claims in the construction business? Are there differences between excusable
and non-excusable claims? Is the Contractor even entitled to apply claims on
WWTP projects due to signed Contracts taking the SCC into consideration? One of the main targets regarding Standard Documents
on Tendering Procedure is therefore to minimise the Contractor´s request on
time and/or additionally money in the form of Claims.
To consider the
reasons for and the origin of construction industry claims it is necessary
first to examine the complex nature of construction - especially for P&DB
related projects - and the effects of claim management of the different legal
jurisdictions which may be encountered. Claim and Disputes represent a risk of
loss to both parties to any construction Contract and they are themselves often
the result of other risks, or error and of the unexpected. It is necessary,
therefore, to also consider the wide-ranging risks which exist and how they can
be managed.
The Procurement Policy Department of EBRD develops
and updates procurement policies, rules and methods. It is also responsible for
maintaining a procurement quality assurance system, reviewing complaints and
publishing procurement information. The
Procurement Department maintains international cooperation with other
international financial institutions, undertakes policy dialogues with the
Bank’s Countries of Operations for the improvement of public procurement,
builds institutional capacity of the institutions in the Bank’s countries of operations
and hosts conferences on project procurement topics.
The Standard Tender Documents (STD) have been
prepared by the EBRD for use by the Bank’s clients for the procurement of
goods, works and services on Bank-financed projects and the FIDIC forms
now cover a wide range of projects. Use of these STDs is mandatory for open tendering and
competitive selection procedures. However, the Bank is not a party to the
Contract and does not accept legal responsibility for the adequacy of the
Contract forms contained in these documents. Clients are therefore advised to ensure that the Contract conditions
are suitable and complete in respect of any particular contract.
Other
international financial entities in the country, except EBRD, EC, WB, KfW and
SIDA are acting EIB (European Investment Bank) and are actually preparing water
projects in Kutaisi. A weakness in the Tender Procedures in this case is due to
the fact that the Bank is "flexible” in using Standard Tender Documents: therefore
the procedures either of the ADB or the WB will be used.
However,
the Bank set up only General Guidelines for Procurement Procedures, using as a
contract base mainly FIDIC Conditions. This flexibility incurs problems for all
participants with a variety of possibilities for TD, and therefore it is
complicated to prepare and implement standardisation for procedures and this
might vary from case to case.
EU Works Contracts cover primarily the execution of Works or work related
to one of the activities referred to in Annex II to Directive 2004/24/EU or its
realisation. "Work” means the outcome of building or civil engineering works
taken as a whole, which is sufficient in itself to fulfil an economic or
technical function.
Works Contracts are usually concluded by the partner country with which the
European Commission has a financing agreement (under indirect management).
Comparing the Standard Tender Documents of EBRD and EU Standard
Procedures there are differences linked primarily with several financial
resources and modalities for financing for EU projects. Therefore EU Standard
Documents offer possibilities for financing, either from the EU Budget or EDF
projects. Based on different resources and different contracting, authorities-prepared
and submitted documents offer more possibilities and variety.
As a relevant support to all EU Tendering Procedures there is a PRAG
(Practical Guide) for EU financed investment projects with many useful remarks
and notices for preparing Standard Tender Documents.
Practical Guide
(PRAG) and how to use it
Procedures established by the European Commission for procurement and the awarding
of grants under the relevant EU external aid programmes are consolidated in a Practical
Guide (PRAG). A
PRAG explains the contracting procedures applying to all EU external actions
financed from the EU general budget (the EU budget) and the European
Development Fund (EDF). Any deviation from PRAG and its Annexes requires either
derogation or an exception from the relevant European Commission services in
accordance with internal rules.
PRAG provides
users with the comprehensive information necessary to undertake procurement or
grant procedures from the very first steps to the award, signature and
implementation of contracts. The annexes cover both the award phase and the
execution of contracts. The Guide outlines the contracting procedures to be
used in direct management and indirect management with ex-ante approval or with
ex-post controls by the European Commission.
The financing of external actions is governed by the applicable EU and EDF
Financial Regulation, the common rules and procedures for the implementation of
the Union's instruments for financing external action (CIR) and by the relevant
basic acts, for example, programme regulation, such as the DCI, ENI, IPA II, or
EIDHR for actions financed from the EU budget, and the Cotonou Agreement for
actions financed from the EDF.
Structure of presented Guidelines
The main importance has
therefore 6 separate Tender Documents A1-B3 (Dossiers) prepared, based on
standard EBRD and EU Tendering Procedures as follows.
Manual Part A - Methodology of projects
under the terms of the EBRD
Part A1
Tender Documents for Design Works
Part A2
Tender Documents for Site
Supervising
Part A3
Tender Documents for Works
(Construction)
Manual Part B - Methodology of projects under the terms of the EU
Part B1
Tender Documents for Design Works
Part B2
Tender Documents for Site
Supervising
Part B3
Tender Documents for Works
(Construction)
Agenda:
9:00 - 10.30
Explanation of the Project Manuals and how to work
with them
Milan Oleriny
10:30 - 10:45
Coffee break
10:45 - 12:15
FIDIC - introducing to Contract Conditions
Milan Oleriny
12:15 - 13:15
Lunch
13:15 - 14:45
Environmental Impact Assessment
Milan Oleriny, Boris Balog
14:45 - 15:00
Coffee break
15:00 - 16:00
Public Procurement Legislation
Boris Balog