1. REGIONAL COMPETITIVENESS OPERATIONAL PROGRAMME 9 TH SECTORAL MONITORING COMMITTEE MEETING 22 November 2011 – Ankara

2. 1.Opening statements – by the Head of the Operating Structure, and by the Commission (HoS + EC) 2.Approval of the Minutes of the last meeting and the agenda of the Meeting (HoS + EC) 3.Information on the activities of the Audit Authority in the preparation of the Annual Audit Activity Report for the RCOP (Audit Authority) 4.Information on programming (OS) - 1st project package - 2nd project package - 3rd project package (OS+EIF) - 4th project package 5.Information on implementation (OS) - Tendering and contracting - Implementation - Absorption (n+3), procurement plans and disbursement forecasts 6. Information on technical assistance and communication activities (OS) 7. Information on monitoring and evaluation activities (OS) - Monitoring Report and Monitoring Sheets - Interim evaluation (OS + Strategic Coordinator) 8.Information on preparations for Accreditation of Finance and Contracts Unit in RCP CID and conferral of management audit follow-up of the DG REGIO (OS+EC) 9. Information on recent administrative reorganisation and new institutional set-up of RCP-CID (OS+ NAO) 10. Information on the revision and extension of the Operational Program for years 2012/2013 (OS +EC+ Strategic Coordinator) 11. Indicative date for the next Sectoral Monitoring Committee (HoS + EC) 12. AOB Draft Agenda For the 9 th Sectoral Monitoring Committee Meeting For the Regional Competitiveness Operational Programme in Turkey (22 November 2011, 09:30)

3. INFORMATION ON PROGRAMMING - 1st project package - 2nd project package - 3rd project package - 4th project package

4. STATE OF PLAY IN FIRST PROJECT PACKAGE

5. End Recipients of Assistance KOSGEB, KOSGEB, Small and Medium Enterprises Development Organization TUBITAK, TUBITAK, The Scientific and Technological Research Council of Turkey MoSIT-DG for R&D, MoSIT-DG for R&D, Ministry of Science, Industry and Technology DG for Industrial Research and Development (3 projects) MoCT, MoCT, Ministry of Culture and Tourism TOBB, TOBB, The Union of Chambers and Commodity Exchanges of Turkey MoE, MoE, Ministry of Economy MoSIT – RCP-CID MoSIT – RCP-CID, Technical Assistance + Publicity 1st Package of Project TOTAL BUDGET: 99.402.500 €

6. 1st Package of Project TUBITAK, TUBITAK, The Scientific and Technological Research Council of Turkey INNOFOOD MAJOR PROJECT  First Submission of the Documents – 26.02.2010  Admissibility Letter – 23.04.2010  Comments from the EC – 11.10.2010  Second Submission of the Documents – 29.07.2011 Under Assessment

7. STATE OF PLAY IN SECOND PROJECT PACKAGE

8. SECOND PROJECT PACKAGE - STATE OF PLAY 1- Business Development Center 2- Big partnership of small enterprises 3- Hazelnut Licensed Warehouse and Spot Exchange 4- Strengthening the Infrastructure for Furniture Production 5- Tea Research and Application Centre 6- My Bee, My Honey, My Honeycomb 1- Business Development Center 2- Big partnership of small enterprises 3- Hazelnut Licensed Warehouse and Spot Exchange 4- Strengthening the Infrastructure for Furniture Production 5- Tea Research and Application Centre 6- My Bee, My Honey, My Honeycomb Name of Proposal Submission Date Approval Date 26. 10. 2010 23.11.2010 7- Activation of “Specialty Foods Cluster” in “GAP Region” 8- Sustainable Tourism Development 7- Activation of “Specialty Foods Cluster” in “GAP Region” 8- Sustainable Tourism Development Location Van Tokat Giresun Kayseri Rize Ordu Van Tokat Giresun Kayseri Rize Ordu Ş.Urfa – İzmir Mardin Ş.Urfa – İzmir Mardin 19.01.2011 08.02.2011 19.01.2011 08.02.2011 Rejected – 1 5.04.2011 03.03.2011 Rejected – 1 5.04.2011 03.03.2011 9- Establishment of Cereals Exchange and Licensed Warehouse 10- Hand-“Made in Hatay” 11- Establishment of a “CuF” for Industrial Forestry Products 12- Impr. of the Shared Industrial Infr. of the Pistachio Pros.Sector 13- Increasing Competitiveness of Middle Black Sea Region (TR83) 14- Establishment of a CuF for Furniture and Mechanics 9- Establishment of Cereals Exchange and Licensed Warehouse 10- Hand-“Made in Hatay” 11- Establishment of a “CuF” for Industrial Forestry Products 12- Impr. of the Shared Industrial Infr. of the Pistachio Pros.Sector 13- Increasing Competitiveness of Middle Black Sea Region (TR83) 14- Establishment of a CuF for Furniture and Mechanics Ş.Urfa Hatay Kastamonu Siirt Samsun Amasya Ş.Urfa Hatay Kastamonu Siirt Samsun Amasya 01.03.2011 04.05.2011 13.06.2011 18.04.2011 18.06.2011 03.11.2011 04.05.2011 13.06.2011 18.04.2011 18.06.2011 03.11.2011 17- Natural Stone Manufacturing and Marketing Support Centre Gaziantep 13.05.2011 n/a Budget Total : 135.122.381 € 15- Regional Industrial Collaboration in Cotton Fibre Manufacturing Laboratory Diyarbakır 13.05.2011 18.07.2011 16- Samsun Metals Metrology and Calibration Laboratory Samsun 08.06.2011 03.11.2011 18- Regional Industrial Design and Modelling Centre Bayburt 20.04.2011 04.11.2011

9. SECOND PROJECT PACKAGE – PLANNING 19- Enterprise Development Center 20- Karatekin University – SETEM 21- Marble Production Common Use Facility 22- FIKAP 23- Red Pepper Cluster Initiative 24- Enterprise Development Center 25- Investment Promotion Center 19- Enterprise Development Center 20- Karatekin University – SETEM 21- Marble Production Common Use Facility 22- FIKAP 23- Red Pepper Cluster Initiative 24- Enterprise Development Center 25- Investment Promotion Center Name of Proposal Estimated Submission Date First half of 2012 Location Osmaniye Çankırı Amasya Giresun K.Maraş Sorgun – Yozgat Yozgat Osmaniye Çankırı Amasya Giresun K.Maraş Sorgun – Yozgat Yozgat 26- Enter prise Development Center 27- Atatürk University – Technology Oriented Support Center 28- Apricot Valley and Green Energy Storage Facility 29 -Whey Powder Production Facility 30- Yeniçam Shipyard CuF 31- Enter prise Development Center 26- Enter prise Development Center 27- Atatürk University – Technology Oriented Support Center 28- Apricot Valley and Green Energy Storage Facility 29 -Whey Powder Production Facility 30- Yeniçam Shipyard CuF 31- Enter prise Development Center Elazığ Erzurum Malatya Trabzon K.Maraş Elazığ Erzurum Malatya Trabzon K.Maraş 32- Winter Tourism Center 33- Enterprenurship Consultancy Center 34- Milk Processing CuF 35- Olive oil CuF 36 –Mount Pamuk Highland Tourism 37- In the spring in Van 38- Kommagene – Nemrut Tourism Development 39- İshakpaşa Palace Tourism Promotion Project 40- Enterpreneurship Consultancy Center 41- Aydınlar Tourism Promotion Project 42 - Increasing the Regional Competitiveness in Kars, Ağrı, Ardahan and Iğdır 32- Winter Tourism Center 33- Enterprenurship Consultancy Center 34- Milk Processing CuF 35- Olive oil CuF 36 –Mount Pamuk Highland Tourism 37- In the spring in Van 38- Kommagene – Nemrut Tourism Development 39- İshakpaşa Palace Tourism Promotion Project 40- Enterpreneurship Consultancy Center 41- Aydınlar Tourism Promotion Project 42 - Increasing the Regional Competitiveness in Kars, Ağrı, Ardahan and Iğdır Ardahan Bafra – Samsun Kars G.Antep Iğdır Van – Gevaş Adıyaman Ağrı Bitlis Siirt Kars, Ağrı, Ardahan, Iğdır Ardahan Bafra – Samsun Kars G.Antep Iğdır Van – Gevaş Adıyaman Ağrı Bitlis Siirt Kars, Ağrı, Ardahan, Iğdır Budget – 149.877.619 € (est.)

10. STATE OF PLAY IN THIRD PROJECT PACKAGE

11. THIRD PROJECT PACKAGE - STATE OF PLAY 32 M.€ IPA Contribution 500 m.€ Credit Volume for SMEs Under implementation EIF provided info. first results 4 Steering Com. held. Need Assess. For KGF carried out Greater Anatolia Guarantee Facility - GAGF OIS – Business Plan (BP) approved Contribution Agreement May 2011 16.3 Mil. € Budget Implementation will start at the second half of 2011 Indicative Launch Date on 3rd week of Dec. G-43 Anatolian Venture Capital Fund Establishment of Seed capital fund Establishment of Technology & Innovation oriented fund, Enlargement of GAGF Open new project proposals

12. Total Volume: ~ EUR 150 million Total Number of Loans: >2,700 Total Number of SMEs: 2,500 2011 Q3 Results

13. Portfolio build-up at 30% Non-linear Exponential once lending starts Number of SMEs reached already hit the target Indicates smaller loan size

14. Number of loans breakdown (by the end of Q2) Chart evolving as portfolio grows Regional Breakdown of Loans

15. PROGRESS IN 1ST 2ND AND 3RD PACKAGE

16. PROGRESS BY PRIORITY AXES IN 1ST 2ND AND 3RD PACKAGE Priority 1: Improvement of Business Environment (300.697.654€)

17. Priority 2: Strengthening of Enterprise Capacity and Foster Entrepreneurship (37.488.240€) PROGRESS BY PRIORITY AXES IN 1ST 2ND AND 3RD PACKAGE

18. STATE OF PLAY IN FOURTH PROJECT PACKAGE

19. FOURTH PROJECT PACKAGE ACTIVITIES TIMELINE

20. TOTAL BUDGET: ~ 761.570.011,54 EUR

21. PROJECT IDEAS BY APPLICANTS

22. PROJECT IDEAS BY MEASURES TOTAL BUDGET: ~ 761.570.011,54 EUR

23. Planned Activities to Achive According to Our Timeline Interviews with instutitons – 5 Dec. – 23 Dec. 2011 Identification of the Operations – 26 – 30 Dec. 2011 Finalization of the OISs with the assisstance of TA Project – Mid 2012 at the latest 4th Package of Projects

24. INFORMATION ON IMPLEMENTATION -Tendering and contracting -Implementation - Absorption (n+3), procurement plans and disbursement forecasts

25. Total Projects Under Coordination of RCP – CID Total Projects Under Coordination of RCP – CID approved OISs (28 project) Processing at the ERA/OS at the CFCU at the EUD Under shortlisting Under evaluation Under contract prep. Awardedtotal number of contracts 62122333994 budget122.010.82821.151.3032.598.9104.432.03621.193.8531.186.50067.410.600239.984.030

26. Distribution of Contracts

28. ALLOCATED BUDGET FOR RCOP 2007-2011 PROGRAMMING PERIOD YearEU Contribution (EUR) National Contribution (EUR) Total EUR 200741.900.0007.394.118 49.294.118 200843.500.0007.676.471 51.176.471 200954.800.0009.670.588 64.470.588 201071.430.00012.605.294 84.035.294 201188.020.00015.532.941 103.552.941 TOTAL299.650.00052.879.412 352.529.412

29. DISBURSEMENT FORECAST AND N+3 GAP *Figures also include the advance payment which is equal to 64.275.000 €. Disbursement Forecast (EU Contribution) -October 20102011201220132014201520162017TOTAL 1st PP59,5774,973,23222,399,18230,358,50114,023,6438,491,9511,840,231 82,146,317 2nd PP 003,416,28582,850,01578,755,90867,045,9441,631,848 233,700,000 3rd PP27,200,00013,855,00000000 41,055,000 4rd PP0000050,000,000 150,000,000 TOTAL 27,259,57718,828,23225,815,467113,208,51692,779,551125,537,89553,472,07950.000.000 506,901,317 TOTAL (cumulative) 27,259,57746,087,80971,903,276185,111,792277,891,343403,429,238456,901,317506,901,317 N+3 Expenditure Requirements (per year) 41,900,00043,500,00054,800,00071,430,00088,020,000 299,650,000 Pre-finance* 64,275,000 Expenditure paid and declared*(cum ulative) -22,375,00021,125,00075,925,000147,355,000299,650,000 N+3 Gap 49,634,57724,962,809-4,021,72437,756,792-21,758,657103,779,238157,251,317207,251,317

30. DISBURSEMENT FORECAST AND N+3 GAP

31. INFORMATION ON TECHNICAL ASSISTANCE AND COMMUNICATION ACTIVITIES

32. ‘Technical Assistance on Institutional Building for the Implementation of RCOP’ Operation

33. Support to the Accreditation Process FCD Follow-up on the findings of the Compliance Audit Accreditation package revised Preparation of the RCP-CID staff for Verification Audit Main activities June-November

34. Training and capacity building Capacity building RCP-CID and Internal Audit Unit: IPA Programme Management training for new staff (12-19 September) Training and coaching FCD on payments procedures Training on TA contract management and financial management topics On the job support to Internal Audit Unit Main activities June-November Capacity building end-recipients: –TNA end-recipients report finalised –Training programme designed –Recruitment of trainers

35. Support to project development Support to submit concept-notes for 4th package Selection system for concept-notes for new projects prepared First screening of submitted concept-notes Main activities June-November

36. Preparation of Tender Dossiers Design team recruited and ready to work: Start of preparation of Tender Dossier for Kastamonu Operation: ”Establishment of a Common-use Processing Facility for Industrial Forestry Products” Main activities June-November

37. Study tour to Croatia Study Tour to Croatia 16 staff members of FCD, 16 – 22 October 2011, 5 working days programme Internships to Croatia 3 staff members of FCD, 16 October- 12 November, 20 working days programme Main activities June-November

38. Planned support to the Accreditation Process FCD Follow-up on the findings of the Verification Audit Preparation of FCD staff to take over conferral of management from CFCU Main activities planned for November 2011- May 2012

39. Planned training and capacity building 6 trainings for RCP-CID and study tours and internships: Leadership Training Evaluation management, monitoring & progress reporting, on the spot checks (December 2011) Quality management & Risk Mangement, and Internal Control systems (January 2012) Project generation and Pipeline management (January 2012) IPA Major Projects and Feasibility and Cost Benefit Analysis (February 2012) Procedures Manual Implementation (March 2012) Capacity building FCD: Procurement Procedures: 2 workshops planned Financial Management: 3 workshops planned Main activities planned for November 2011- May 2012 Capacity building end-recipients: – Planning depending on approval OISs – OIS Development training to 4th project package potential end recipients – Further development of Concept-notes into OISs (4th Package)

40. PREPARATIONS FOR ACCREDITATION OF FINANCE AND CONTRACTS UNIT IN RCP- CID AND CONFERRAL OF MANAGEMENT AUDIT FOLLOW-UP OF THE DG REGIO

41. The Cooperation Agreement with CFCU Cooperation with CFCU on the preparation and control of the tendering documents like ToRs, TSs and Volume 4 and 5 of Works Contracts 2010 Addendum to the Agreement RCP-CID prepares and controls the full set of tendering documents and sends to CFCU. 2011 Accreditation and Conferral of Management. Taking the delegated tasks on board from CFCU 2012 Gradual Takeover of the Delegated Tasks

42. Current Accreditation Process Decision on Conferral of Management Powers (2012) Verification Audit (November 2011) Extension of the Cooperation Agreement with CFCU until Conferral of Management Powers (November 2011) Official Accreditation Application of NAO to EC (September 2011) Renewal of National Accreditation Application (September 2011) Compliance Audit (May-July 2011) National Accreditation Application ( April 2011)

43. Accreditation Application Accreditation Application to NAO26 th of April 2011 After the date of 26 th of April 2011, substantial changes were occurred. The organizational structure of the Centre was revised on 13 rd May 2011 The Decree Law changed the Organizational Structure and Responsibilities of the Ministry on 8 th June 2011 Ministerial Consent changed the position of the Center to Directorate on 20 th September 2011 Renewal of Accreditation Application 21 st of September 2011

44. AREAFINDINGCURRENT STATUS 1.Legal BasisWithin the scope of restructuring of the Ministries, the new position of the center and the reporting line between the Head of the IPA Unit and the HOS should be clearly defined. Decree Law on restructuring the Ministries. Ministerial Consent. Prime Ministry Circular. Decree Law 666, Salary policy of the Ministry. 2.Procedure Manuals, Agreements etc. The establishment of the Ministry of Science, Industry and Technology will necessitate an amendment in related documents. The Procedure Manuals, Agreements were revised and the accreditation application was ensured with these revisions. 3.Accounting Procedures The specification of the accounting system should be defined and training should be provided to the related staff. Computerized Accounting System (PRESTO) was purchased from LIKOM Company and installed. User trainings were given to related staff. Short Term expert Mrs. Nalan AKDOGAN was recruited and chart of account and manual (Chapter J, annexes) were revised. On the job trainings are on going process Compliance Audit Findings

45. AREAFINDINGCURRENT STATUS 4.Management Information System The Management Information System to be installed should be tailored within a specific time schedule to provide the management information reports that are defined by the management of RCP-CID. ToR Document of MIS was prepared and sent to CFCU. Until the MIS becomes fully operational, Presto Program and IMIS will be used as an interim solution. 5.Internal AuditorsInternal Auditors should be trained on reviewing identification of sensitive posts and assessing the actions taken to mitigate risks. The Internal Auditor was coached by a short term expert recruited in the context of TA Project for his audit activites between the dates of 14-18 November 2011. As a second part of this TA mission; it is planned to provide another training and coaching session in the begining of 2012, at the latest. Compliance Audit Findings

46. AREAFINDINGCURRENT STATUS 6.Budgetary procedures to ensure availability of funds Implementing Agreement between the NAO and the OS should provide the procedures for Bridging Finance. Procedure for Bridging Finance was discussed with NAO/NF in the meetings which were organized in 14 th June 2011 and 2 nd November 2011. Necessary amendments were made in NF Manuals according to the Bridge Finance Procedure. A special item was added to the Implementing Agreement which will be signed with RCP-CID and NF after the conferral of management decision. Compliance Audit Findings

47. THANK YOU FOR YOUR ATTENTION Ministry of Science, Industry and Technology Regional Competitiveness Programme Coordination and Implementation Directorate e-mail: ipa@sanayi.gov.tr Web adress: ipaweb.sanayi.gov.tr