obtaining eu funding for a greenfield project in southern romania

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.

2 MMag. Einfalt Stefan - Vortrag AWO Forum 18.06.2012


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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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)


Greenfield project

voestalpine Steel Service Center Romania SRL …

To construct a voestalpine Steel Service Center at the site in Giurgiu,

Romania



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



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


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



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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.




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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




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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!
