Model diagram to consider infrastructure projects in Serbia

1. Model diagram to consider infrastructure projects in Serbia Aleksandar Kovacevic

2. Five distinctive roles of the Government • Legislation • Jurisprudence • Regulatory authority • Executive governance • Government as a private owner of commercial assets

3. Primary project classification • Commercial investment intended to generate profit and perform commercial services or • Investments intended to enhance public goods (enhance competition, security of supply, environmental protection and good governance or complement market performance)

4. Government Commercial Investments • Does it diverts investment resources away from private investors by offering higher interest and/or lower risk? • Does it involve any state guarantee, state aid, priority market access or use of public goods? • Does it create any monopoly power, transit rent or natural resource rent for the Government? If yes, is there mechanism in place to control effects to the quality of governance? • Does it add to competition and / or other public goods? If yes, which public goods?

5. Investments into enhancements of public goods • Property rights and rule of law • Multilateral and bilateral international agreements of general nature • Environmental public goods • Competition, security of supply, etc. • Narrow definition of “General Economic Interest” • Require public participation in formulation and decision making • Multilateral and bilateral agreements related with implementation and projects • Attention to crossover derogation and interrelations

6. Link to State Aid regulations • Special case under State Aid regulation • Services of General Economic Interest • Universal Service Obligation • No offset rule • Firms could provide service with net loose • Covers externalities and public goods • Should not lead to undue market distortions • Benefits / costs analyzes

7. Strategic processHide & seek game between information and the real life

8. Structure of strategic decision Goal Main objectives KFS Sector strategies Originatedobjectives Projects SDF SDF Secondaryobjectives

9. Aarhus Convention • The subject of the Aarhus Convention goes to the heart of the relationship between people and governments. The Convention is not only an environmental agreement, it is also a Convention about government accountability, transparency, and responsiveness. • The Aarhus Convention grants the public rights and imposes on Parties and public authorities obligations regarding access to information and public participation. • The Convention recognizes that people have the right to take part in basic decisions affecting their lives. It also recognizes that the quality of these decisions can be improved through the active involvement of the public concerned. Public participation in decision-making pulls together many of the threads of the Convention into concrete results, and thus is one of its most important subjects. Article 6 is to be enforced by article 9, paragraphs 2 and 3.

10. Aarhus Convention – samples

11. Case: Energy Community Treaty • Article 14The Parties recognize the importance of the rules set out in Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control. Each Contracting Party shall endeavor to implement that Directive. • Article 16The “acquis communautaire on environment”, for the purpose of this Treaty, shall mean (i) Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directive 97/11/EC of 3 March 1997 and Directive 2003/35/EC of the European Parliament and of the Council of 26 May 2003, (ii) Council Directive 1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC, (iii) Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants, and (iv) Article 4(2) of Directive 79/409/EEC of the Council of 2 April 1979 on the conservation of wild birds.

12. Case: Energy Community Treaty • Annex II 1. Each Contracting Party shall implement Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directives 97/11/EC of 3 March 1997 and Directive 2003/35/EC of the European Parliament and of the Council of 26 May 2003, on the entry into force of this Treaty.

13. Recommendations • Develop flow diagram of decision making process for projects aimed to enhance public goods • Develop decision making matrix to prioritize projects • Identify loopholes in the legal framework and harmonize basic definitions and principles with the EU acquis • Make the procedure and the matrix legally binding • Empower public participation through targeted assistance and training where needed. • Set up appropriate check list prior to appraisal and prioritization of projects