EXPERT EVALUATION NETWORK DELIVERING POLICY ANALYSIS ON THE PERFORMANCE OF COHESION POLICY

ISMERI EUROPA EXPERT EVALUATION NETWORK DELIVERING POLICY ANALYSIS ON THE PERFORMANCE OF COHESION POLICY 2007-2013 TASK 2: COUNTRY REPORT ON ACHIEVEMENTS OF COHESION POLICY MALTA VERSION: FINAL DATE: DECEMBER 2010 PAOLA CIRILLI ISMERI EUROPA A reprt t the Eurpean Cmmissin Directrate-General Reginal Plicy

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Cntents LIST OF ABBREVIATIONS...3 EXECUTIVE SUMMARY...4 SECTION 1 - SOCIO-ECONOMIC CONTEXT...6 SECTION 2 - THE REGIONAL DEVELOPMENT POLICY PURSUED, THE EU CONTRIBUTION TO THIS AND THE POLICY ACHIEVEMENTS OVER THE PERIOD...8 SECTION 3 - EFFECTS OF INTERVENTION...16 SECTION 4 EVALUATIONS AND GOOD PRACTICE IN EVALUATION...17 SECTION 5 - CONCLUDING REMARKS FUTURE CHALLENGES...18 REFERENCES...20 INTERVIEWS...20 TABLES...21 Malta, final versin December 2010 2 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy LIST OF ABBREVIATIONS AIR ERDF ESF EU ICT IT MA MEPA NGO NPR NSRF R&D RTD SME TEN Annual Implementatin Reprt Eurpean Reginal Develpment Fund Eurpean Scial Fund Eurpean Unin Infrmatin & Cmmunicatin Technlgy Infrmatin Technlgy Managing Authrity Malta Envirnment & Planning Authrity Nn-gvernmental Organizatin Natinal Prgramme Refrm Natinal Strategic Reference Framewrk Research & Develpment Research & Technlgy Develpment Small & Medium Enterprise Trans-Eurpean Netwrk Malta, final versin December 2010 3 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy EXECUTIVE SUMMARY The Maltese develpment pattern is influenced by the typical features f small island states: scarce natural resurces, high density f ppulatin, lack f critical mass in infrastructure investment, high external dependency etc. These features have an impact n transprt, the envirnment and the sustainability f turism and make it necessary t strengthen the Island s knwledge-based ecnmy in rder t prmte cmpetitiveness. EU Chesin Plicy cntributes cnsiderably t tackling these issues thrugh supprt frm the ERDF and Chesin Fund, while the Island participates in crss-brder, trans-natinal and interreginal cperatin prgrammes 1. The pririties f these prgrammes are highly cmplementary and cnsistent with the key develpment challenges: the supprt is cncentrated mainly n sustainable develpment and envirnmental prtectin, (e.g. waste management and water treatment plants), knwledge and innvatin as well as transprt. Malta has been allcated EUR 728 millin 2 f ERDF and Chesin Fund fr the 2007-2013 perid. Envirnment-related investment represents a key pririty and accunts fr 38% f the ttal allcatin; 25% f the ttal ERDF has been allcated t accessibility and transprt; arund 22% has been alltted t territrial develpment and 13% t supprt enterprise envirnment. The verall cmmitment rate as at end 2009 amunted t arund 50% f ttal funding allcated and during 2009 there were 229 prjects (including aid schemes) being implemented. In 2009 the Prgramme started prducing its first utputs and results n the grund: first signs f cnstructin f infrastructure; equipment being prcured and s mbilisatin f much needed supprt fr enterprises. The recent ecnmic crisis did nt change the strategy and the bjectives f the OP, which are arguably well suited fr fstering the upturn in the ecnmy, thanks t the fcus n transprt infrastructure, envirnment, energy territrial develpment (including turism) and enterprise supprt. T bst investment in enterprises and mitigate the cnsequences f the crisis, in sme cases, the allcatin f the funds was diverted frm public infrastructure t private sectr supprt (e.g. EUR 12 millin were allcated t a number f aid schemes fr firms, fcusing n e-business develpment, R&D, internatinal cmpetitiveness, innvatin and energy). Evidence n perfrmance f interventin is limited and it is t early t identify examples f gd practice. The Mid-Term Evaluatin f the ERDF OP is currently being carried ut and sme 1 The Territrial Operatinal Prgramme are: Crss-brder cperatin with Italy; MED Prgramme; INTERREG IVC Prgramme; ESPON II Prgramme; INTERACT II Prgramme. 2 ERDF: EUR 444 millin; Chesin Fund: EUR 284 millin; EUR 15 millin are related t the Eurpean Territrial Cperatin bjective. Malta, final versin December 2010 4 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy results can be expected by the end f the year. The ex ante evaluatin f the OP, carried ut initially, is mstly an analysis f the cherence f the strategy and did nt attempt t assess the ptential effects f the prgramme. An analysis f the effectiveness f prjects c-financed by the Structural Funds in 2004-2006 examined the achievements f a sample f 13 initiatives, fcusing mainly n recmmendatins fr the future in terms f mnitring and cllectin f data. Sme f the main future challenges facing EU Chesin Plicy include: cntinue t tackle the lack f innvatin and entrepreneurial culture and increase the capacity f Malta t generate research and apply new technlgies; increase awareness f envirnmental prblems amng peple and implement larger prjects with a significant impact n envirnmental prtectin; develp an evaluatin culture t systematically assess the perfrmance f plicy; imprve cperatin between administrative bdies. Malta, final versin December 2010 5 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy SECTION 1 - SOCIO-ECONOMIC CONTEXT Malta is the smallest and mst densely ppulated cuntry in EU. The Maltese archipelag cnsists f three islands, Malta, Gz and Cmin, with a ttal ppulatin f arund 400,000 (see Table 1 3 ), living in an area f 316 km². The ppulatin grew by 0.6% a year ver the years 2000-2006. As all small island states, the Maltese ecnmy is characterised by limited available land, limited natural resurces and a very strng external dependency which increases the risk f expsure t exgenus frces. In summary the main sci-ecnmic features which are the cncern f plicy cnsist in: the small size f the enterprises; specialisatin in traditinal sectrs; the seasnal nature f key sectrs such as turism; the lw level f expenditure n R&D and innvatin; the limited innvatin culture (there is a need t ppularize science and technlgy since yung peple tend t study ther subjects - less than 20% f students take science and technlgy subjects); the difficulty in achieving critical mass in plicy implementatin, especially in the develpment f infrastructure; presence f spatial disparities despite the small size f the cuntry. As regards the last pint, disparities are mainly related t Gz lagging behind. Gz is the secnd largest Island f the archipelag and has a ppulatin f arund 30,000. It is highly dependent n the main island ecnmy, recrding lwer GDP grwth, lwer emplyment rates and lwer cnsumptin per head. Its GDP per capita was nly 76% f the natinal average in 2007. Other spatial disparities are widening within the main island and cncern sme areas in the nrth with mre scattered ppulatin. The main develpment needs f Malta are related t these features and t the high ppulatin density: Water supply is a key issue. There are three plants n the island, which are strategically placed. Arund 54% f ttal water cmes frm desalinatin, the rest cmes frm grund water. 3 See Excel file fr Table 1. Malta, final versin December 2010 6 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Energy prvisin is anther significant issue. The largest share f prductin cmes frm il and fr this reasn the cuntry is vulnerable t increases in il prices. In Malta, lcal electricity is mainly dependent n nn-renewable energy surces. T face this prblem, the Gvernment is trying t encurage the use f renewable energy, installing phtvltaic panels n rftps t prduce electricity and heating. Related t this, air quality is als a cncern due t emissins frm the pwer generatin plants. Rad and maritime transprt links are imprtant. The rad system was riginally designed t accmmdate light traffic vlumes. The increasing amunt f traffic has required significant upgrading. Given the natural characteristics f the island, there is a high dependence n sea (fur prts Valletta, Marsaxlkk and Cirkewwa in Malta and Mgarr in Gz) and air transprt (ne airprt in Malta and a heliprt in Gz). Malta is the secnd mst pen ecnmy in the EU trade averaging 82% f GDP since EU entry in 2004. Glbal ecnmic develpments, therefre, tend have a majr impact n the ecnmy 4. The glbal recessin predictably affected the Maltese ecnmy with a lag, trade links with its majr trading partners transmitting their ecnmic dwnturn t Malta. Malta s GDP per head in PPS, which rse prgressively relative t the EU average up until 2005, declined between 2006 and 2008 and was in 2009 arund 78% f the EU average. The emplyment rate is amng the lwest in the EU (55% in 2009). The Maltese ecnmy is characterised by a prevalence f micr enterprises perating mainly in manufacturing and turism. In recent years, the manufacturing sectr has faced majr challenges frm imprts, its share f utput and emplyment in the ecnmy declining in the perid 2003-2008 5. Turism is imprtant fr ecnmic grwth and emplyment creatin, but is affected by internatinal ecnmic cnditins that can increase r reduce freign visits significantly. In 2009, turism frm abrad declined by 8.4% as a result f the glbal recessin. 4 See The Maltese ecnmy: the recessin and the challenges beynd, Central Bank f Malta, 16 July 2010 5 See Strategic Reprt f Chesin Plicy 2007-2013, December 2009, Malta. See Table 1 in the Excel file fr the decline in the share f emplyment between 2000 and 2007. Malta, final versin December 2010 7 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy SECTION 2 - THE REGIONAL DEVELOPMENT POLICY PURSUED, THE EU CONTRIBUTION TO THIS AND THE POLICY ACHIEVEMENTS OVER THE PERIOD THE REGIONAL DEVELOPMENT POLICY PURSUED The NSRF 2007-2013 was the basis fr tw Operatinal Prgrammes: OP I Investing in Cmpetitiveness fr a Better Quality f Life (c-financed by the ERDF and the CF); and OP II Empwering Peple fr Mre Jbs and a Better Quality f Life (c-financed by the ESF). This study is fcused n ERDF and Chesin Fund nly. All f Maltese archipelag is eligible fr supprt under the Cnvergence Objective. The main pririties fr the develpment f the cuntry ver the perid 2007-2013 are frmulated in the NSRF and in NRP 2008-2010; bth dcuments are linked with the Lisbn Strategy and with the sectral strategies 6 frmulated by the Gvernment. The resurces f Chesin Plicy are mainly fcused n supprting sustainable and integrated ecnmic develpment with the aim f mdernising and diversifying the structure f the ecnmy. The 2007-2013 natinal strategy cntinues t fllw the apprach adpted in the 2004-2006 perid, fcused bth n strengthening the cmpetitiveness f the Maltese ecnmy and n a sustainable use f the envirnment. The main pririties are the fllwing: sustaining investment in knwledge and innvatin and in R&D activities and unlcking business ptential (especially SMEs) thrugh the prmtin f ICT and RTD activities in enterprises. In particular, in relatin t knwledge and innvatin, the ppularisatin f science and technlgy is a central pririty. The Natinal Strategic Plan fr Research and Innvatin 2007-2010 is a key dcument in this respect and is fcused n selected areas f natinal interest and ecnmic perfrmance and develping general culture f innvatin; safeguarding f the urban and natural envirnment, imprving water supply and water and waste management, waste water treatment and air quality, integrated pllutin 6 Industry Strategy fr Malta 2007-2010, Gvernment f Malta, Octber 2006; Natinal Strategic Plan fr Research and Innvatin, 2007-2010 Building and Sustaining the R+I Framewrk.; Draft Turism Plicy fr the Maltese Islands 2007-2011, Ministry fr Turism and Culture, September 2006; Slid Waste Management Strategy fr the Maltese Islands, Ministry fr the Envirnment 2001; A Prpsal fr an Energy Plicy fr Malta, Ministry fr Resurces and Infrastructure, June 2006; Draft Renewable Energy Plicy fr Malta, 2007-2010, Gvernment f Malta, August 2006; Natinal ICT Strategy 2004-2006, Ministry fr Investment, Industry and Infrmatin Technlgy. Malta, final versin December 2010 8 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy preventin and cntrl, and interventins aimed at mitigating the effects f climate change; imprving and expanding the transprt netwrk, remving traffic bttlenecks, imprving rad safety and the sea prts; sustaining the turist industry and prmting natural assets, prtecting and enhancing the natural heritage. In rder t be cmpetitive, investment is aimed at imprving the turist facilities thrugh new higher value-added services; imprving energy efficiency t reduce cnsumptin by upgrading generatin plants and distributin netwrks and develping renewable energies (Malta cannt cultivate bifuel crps because f the scarcity f land and water); addressing the specific weaknesses f the Gz ecnmy, fcusing n prmting enterprise and the develpment f key sectrs 7 ; safeguarding the cuntry s urban heritage and prmting the verall imprvement f quality f life thrugh better accessibility, enhanced educatin, strengthened scial and health systems and increased envirnmental mnitring capacity. The pririties f funding under the Territrial Cperatin Objective, which are specific fr each f the six prgrammes, are mainly t strengthen cmpetitiveness; prmte territrial chesin and prtect the envirnment; encurage sci-ecnmic and cultural cperatin; reinfrce the exchange and transfer f knwledge and gd practice and sustain crss-brder cperatin between SMEs. The financial allcatin between and within plicy areas reflects the bjectives f the NSRF and OP. Sme 38% f resurces are devted t "envirnment and energy", 25% t transprt and 22% t territrial develpment, while "enterprise envirnment" receives 13% (Table 3) 8. In general, the financial allcatin f EU funding seems t reflect stated bjectives f the plicy and is in line with the allcatin f natinal resurces, thugh sme preference is given t infrastructure, and in particular t envirnmental prtectin and transprt (rads in particular). Investment in envirnmental prtectin is directed t imprving the treatment f sewage in the Suth and t increase the capacity fr waste treatment, energy recvery and recycling. Particular attentin is given t mitigating the effects f climate change. 7 T facilitate mre effective prgramme management during the 2007-2013, the prmtin f Gz s reginal features is nw addressed under all pririties, rather than gruping all interventins under ne axis. This was als recmmended by the evaluatrs f the mid-term update n the Efficiency f Implementatin f Malta s SPD 2004-2006. 8 See Excel file fr Table 3. Malta, final versin December 2010 9 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Accessibility is an imprtant challenge. The financial resurces allcated t transprt are mainly directed at imprving links between the Maltese Islands and upgrading the Trans-Eurpean Netwrk and majr rads. Financial supprt t turism is aimed at imprving bth the cmpetitiveness f the sectr and the culture f peratrs as well as the small-scale f infrastructure in rural areas 9. Investment in enterprise supprt has increased in cmparisn with 2000-2006 and is aimed at strengthening cmpetitiveness, develping ICT prducts and services, supprting the restructuring f lcal industry and investing in the diffusin f R&D infrastructure as well as in centres f cmpetence. The strategy was defined in the 2006-2007 perid and des nt take accunt f the prblems which have ccurred since 2008 when the ecnmic situatin was very different. The crisis has nt led t any significant mdificatin f initial plans in terms f bth financial allcatin and the plicy measures adpted. The ecnmic recessin has had a cnsiderable impact n the labur market, affecting the ESF 10 especially. ERDF resurces have been shifted mainly t supprt enterprise, in particular t prmte business investment and t strengthen the business envirnment. As reprted in the AIRs fr 2008 and 2009, the prblems resulting frm the internatinal ecnmic crisis caused set-backs and delays in the prject implementatin. The Maltese Authrities have undertaken a series f measures t mitigate the impact f the crisis: EUR 12 millin was diverted frm public infrastructure t private infrastructure in rder t bst investment in enterprises and supprting e-business develpment, R&D, internatinal cmpetitiveness, innvatin and energy. In additin, a number f large-scale public sectr infrastructure prjects were implemented ( Imprvement f the TEN-T Rad Infrastructure; Urban Waste Water Treatment Plant fr the Suth f Malta and Rehabilitatin and Restratin f Existing and Frmer Waste Dump Sites ). Accrding t interviews, the Managing Authrity cntinued t prvide pre-financing fr payments (als fr NGOs and Lcal Authrities) in rder t mitigate delays arising frm cash flw prblems. 9 OP I 2007-2013, Investing in Cmpetitiveness fr a Better Quality f Life, Malta 10 AIR 2009 OP II Empwering Peple fr Mre Jbs and a Better Quality f Life 2007-2013 ESF has been used t c-finance aid schemes fr emplyment and ther initiatives related t family-friendly measures. Malta, final versin December 2010 10 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy POLICY IMPLEMENTATION The main features f the Chesin Plicy implementatin system in Malta are the fllwing: highly centralised prgramme management (i.e. design f the prgramme, prject selectin, crdinatin, mnitring and financial cntrl); cperatin with different Ministries and agencies invlved at several levels in prjects (i.e. with Ministry f Finance 11, which is respnsible f the financial management f EU- Funded prjects and EU Own Resurces; with ther Ministries invlved as Intermediate Bdies). There have been cnsiderable delays in the implementatin f the OP due t a number f issues relating t prject selectin, public prcurement and planning permissin. The prject selectin prcess is lengthy 12 but the MA is aware f the prblem and intends t identify slutins in cperatin with the evaluatrs undertaking the mid-term evaluatin. The aim is t make the prcess mre efficient. Backlgs are created at varius stages f the prcess due t several factrs: limited number f experts within the administratin; unsuccessful prcedures 13 leading t re-launching f tenders; the appeal prcedure, which takes, n average, 3 mnths. Anther cnstraint arises frm the planning prcess and the granting f planning permissin, in particular as regards large-scale infrastructure, which requires extensive studies t be undertaken and is cnstrained by the small size f the island. In 2009 t reduce delays, the Malta Envirnment and Planning Authrity (MEPA) intensified cperatin with Gvernment Departments and regularly updates the MA n the situatin. Despite these prblems and delays, the MA has shwn strng leadership and has wrked efficiently. Indeed, as at end f 2009, 53 peratins were being implemented but limited results were recrded in terms f prgress by the indicatrs. Despite the delays in expenditure, the verall picture as regards cmmitments is mre favurable, these amunting t 56% f the 11 The Ministry f Finance thrugh the Certifying Authrity is respnsible fr the certificatin f the declaratins f expenditure and applicatins fr payment in relatin t the OP befre they are sent t the Eurpean Cmmissin. 12 In 2009, 6 calls were launched and the evaluatin f all calls spilt ver int 2010, as reprted in the AIR 2009. 13 N reactin frm ptential beneficiaries. Malta, final versin December 2010 11 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy ttal resurces allcated (see Table 4 14 ). Mre recent natinal data frm interviews, indicate that at the end f June 2010, the Prgramme s verall cmmitment rate was arund 70%. The amunt f EU funding allcated t enterprise supprt is EUR 120 millin. As f December 2009 15, the cmmitments amunted t 67% f the ttal allcatin. EUR 169 millin is allcated t transprt which is the biggest single area f expenditure and at end-2009, cmmitments amunted t 51% f the allcatin, the same as fr envirnment and energy. Fr supprt f territrial develpment, 60% f the EUR 120 millin allcated (ttal cntributin) had been cmmitted. ACHIEVEMENTS OF THE PROGRAMMES SO FAR The available infrmatin n prgress f Chesin Plicy in the current prgramming perid des nt g beynd the first stages f implementatin. The nly available infrmatin cmes frm the Annual Implementatin Reprt fr 2009 and frm the interviews with the MA and ther relevant stakehlders 16. While effrts in 2008 fcused primarily n setting up the system and prcesses necessary fr the implementatin f OP I, during 2009 there were 229 prjects being implemented, including interventins under the different aid schemes. Enterprise supprt The prjects fr enterprise supprt are included in the Pririty Axis 1- Enhancing Knwledge and Innvatin - within OP I. They are aimed at prmting and strengthening business cmpetitiveness thrugh the investment in plant and equipment as well as in RTDI and ICT. The measures implemented are directed at tackling the mst imprtant natinal initiatives in this regard - a lack f entrepreneurship and risk taking and the need t ppularize science and technlgy as a subject fr yung peple t study. As at end- 2009, 16 prjects and 6 aid schemes had been launched. The Aid Schemes, implemented by Malta Enterprise, the Intermediate Bdy, were as fllws: E-business develpment grant scheme; Innvatin actins grant scheme (envirnment); Innvatin actins grant scheme (innvatin); R&D grant scheme; Small Start-ups grant scheme; Internatinal cmpetitiveness grant scheme. 14 See Excel file fr Table 4. 15 Strategic Reprt Chesin Plicy 2007-2013, Malta December 2009. 16 See List f Interviews at the end f the reprt. Malta, final versin December 2010 12 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy The finance allcated t the package f aid schemes was increased in 2009 frm EUR 20 millin t EUR 27 millin. Of the 16 prjects implemented, the University f Malta manages 11, all f them geared t imprving and develping the envirnment and energy resurces, ICT, high value-added manufacturing and services and bitechnlgy in healthcare. Sme EUR 32.6 millin (ttal public supprt) was allcated t these prjects. Financial engineering has als been develped thrugh the jint Cmmissin-EIB JEREMIE initiative, designed t increase access t finance fr micr, small and medium-sized enterprises. During 2009, the Maltese Authrities undertk a series f measures t mitigate the impact f the crisis and als dubled the allcatin t JEREMIE frm the riginal EUR 5 millin t EUR 10 millin. By the end f 2009, 87 Grant Agreements had been signed with SMEs fr a ttal value f arund EUR 5.6 millin. Human and scial develpment A majr fcus f Structural Fund in this area is t develp and enhance the quality f life f Maltese sciety. All prjects implemented under the Pririty Axis 6 Urban Regeneratin and Imprving the Quality f Life are included in this area, which cvers urban regeneratin; internal mbility; e-accessibility; educatin, scial and health related infrastructure and envirnmental mnitring. 18 prjects and ne Aid Scheme are being implemented. The n-ging prjects are: Urban regeneratin: mainly scial husing and urban transprt; Internal mbility, the develpment f: tw rads (tw cmpleted ut f 4); an alternative transprt link t better cnnect the different parts f the Island. E-accessibility: imprving access t electrnic services and increasing the number f peple with ICT skills. The prject gives access t varius e-services fr mre peple (an eid platfrm, e-services develped thrugh e-frms and e-learning etc.); Educatin Infrastructure: 16 prjects t supply scientific and technical equipment t all public secndary schls; equipment and facilities fr students attending secndary and pst secndary schls; university IT facilities, netwrks, labs fr individual learning. Scial Infrastructure: a prject t imprve the skills f peple with disabilities; Malta, final versin December 2010 13 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy a cmmunity centre. Health Infrastructure: facilities fr the hspital in Gz; a majr prject, the Mater Dei Onclgy Centre, with a ttal budget exceeding EUR 50 millin; supprt fr childcare facilities (EUR 5 millin), t create mre and better places and imprve existing nes. Envirnmental mnitring: A study t mnitr air, nise, sil and water pllutin. Achievements are reprted by means f fur indicatrs: number f children, students r trainees benefiting frm upgraded and mdernised facilities r services ( cre result indicatr - 1,606 at end-2009); number f existing learning facilities refurbished (5); kms f upgraded (nn TEN-T) rads (0.75); Square metres f facilities mdernised and refurbished (1,671.4). It is imprtant t highlight the cmplementarity between the ERDF and ESF. The investment in infrastructure, supprted by OP I (ERDF), are cmplemented by investment in the develpment f human resurces under OP II (ESF). Transprt and telecmmunicatins Pririty Axis 3 Develping the TEN-T is the main axis f the OP I in financial terms. Fur rad transprt prjects have been implemented t upgrade 12 kilmetres f rad in the urban area (Phase 1). A secnd grup f prjects (Phase 2) is aimed at imprving a further 8 kilmetres f rad alng the cast. In mre detail, the fur prjects that have been implemented cnsist f: widening a single lane carriageway t a dual carriageway; imprving the link with the prt f Valletta and upgrading the rad which leads t the ferry terminal; cmpleting the rad which links the capital f Gz with the ferry terminal. The cnstructin f the first half f this rad started in 2004-2006 and will be cmpleted after 2013; upgrading the rad in the nrthern part f Malta. As regards sea transprt, prjects cncern: the refurbishment f breakwaters in the prt f Valletta and the prt f Marsaxlkk; Malta, final versin December 2010 14 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy the refurbishment f the prt f Cirkewwa t imprve the link between Malta and Gz; the upgrading and refurbishment f the carg terminal in Malta (tender in preparatin); the develpment f infrastructure t imprve passenger traffic in the prt f Valletta (tender in preparatin). The develpment reprted as regards transprt relates mainly t the tendering prcess. As indicated in AIR 2009, the prjects are still in their early stages and n wrk has yet started n the grund, hence the indicatrs have nt recrded any prgress. Envirnment and energy The prjects in this area relate t pririty axis 4 Mitigatin and Adaptatin t Climate Change and pririty axis 5 Sustaining the Envirnment within OP I. The interventins implemented and financed under these axes are aimed at imprving water reserves, waste-water treatment and waste dispsal, as well as at eliminating r reducing pllutin and develping renewable energy surces in cmpliance with natinal and EU Directives. The fllwing prjects have been apprved t encurage investment in energy efficiency: Implementing Green Activities at the University f Malta, aimed mainly at installing phtvltaic panels (ttal prject cst EUR 4.7 millin); Prjects undertaken by NGOs and Lcal Cuncils t invest in renewable energy surces r energy efficiency initiatives (within PA 4); The Natinal Fld Relief Prgramme, a prject supprting areas prne t flding (PA 4). At the end f 2009 (EUR 57.2 millin cmmitted at end-2009). The interventins implemented under pririty axis 5 cnsist primarily f large scale envirnmental infrastructure. The ttal allcatin is EUR 165 millin (ttal public), and, at the end f 2009, EUR 78 millin had been cmmitted. Prjects implemented are: Urban Waste Water Treatment Plant fr the Suth f Malta (majr prject ttal prject cst f EUR 70 millin); Rehabilitatin and Restratin f Existing and Frmer Waste Dump Sites; Setting up f the Gz Waste Treatment Facility. The financial prgress highlighted abve is mainly due t the first prject Urban Waste Water Treatment Plant fr the Suth f Malta which is prceeding well. The indicatrs d nt recrd any prgress as at the end f 2009, effrts being mainly fcused n the prcurement prcess. Malta, final versin December 2010 15 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Territrial develpment Interventins in this area are mainly fcused n imprving the turist industry (pririty axis 2 Prmting Sustainable Turism ). The initiatives cnsist f infrastructure, supprt t prduct develpment, niche market develpment and branding. As at the end f 2009, there were 13 prjects and ne aid scheme fr turist cmpanies being implemented. The prjects were directed at: imprving the quality f services prvided (i.e. prjects invlving the rehabilitatin f the natural envirnment); upgrading rural and urban areas (with landscaped urban spaces and ther facilities); cnserving heritage sites (in bth Malta and Gz). Implementatin f the prjects n the grund is still at an initial phase, s that the indicatrs d nt recrd any prgress. SECTION 3 - EFFECTS OF INTERVENTION At the end f 2009, given the relatively shrt time which has elapsed since the start f the prgramming perid and the delays in the launch f the prcedures, it is difficult t identify significant effects but there are signs f interventins having a real influence n the ptential fr develpment. Given that the plicy measures are a cntinuatin f interventin pririties already defined, it is pssible, frm the interviews, t draw a general picture f its ptential effects. First, in relatin t infrastructure, the ERDF and the Chesin Fund cntinue t have a key rle in strengthening territrial chesin, meeting needs as regards the envirnment and transprt. Secnd, the prmtin and strengthening f high value-added ecnmic activities, thrugh investment in enterprise plant and equipment as well as in RTDI-related infrastructure and ICT imprve Malta s ecnmic cmpetitiveness. Finally, it is imprtant t emphasize the cntributin f measures adpted under pririty axis 2 and 6. Urban regeneratin measures have cntributed t imprving the quality f life acrss the island and t strengthening envirnmental mnitring as well as awareness f envirnmental issues. They have als cntributed t imprving the cmpetitiveness f the turist industry. Despite relatively mdest physical advancement f 2007-2013 measures, the cntributin frm the Structural Funds creates the cnditins fr strengthening territrial, ecnmic and scial Malta, final versin December 2010 16 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy chesin. Fr instance, funding has helped t develp and t strengthen transprt (TEN-T), envirnmental prtectin and turism. Since Malta has nt been unduly affected by the glbal financial crisis and the subsequent recessin 17, n substantial changes have been made t the fcus f the interventins launched under OP I 18. As nted abve, in rder t supprt SMEs, which are particularly expsed t the ecnmic dwnturn, the Maltese Authrities have allcated additinal EUR 12 millin t a number f aid schemes supprting R&D, internatinal cmpetitiveness and energy. Accrding t interviews, examples f gd practice amng nging prjects are: As regards Enhancing Knwledge and Innvatin : ERDF grant scheme fr Small Startups t supprt the creatin f new, high value-added enterprises by part-financing their initial perating csts; As regards Safeguarding the Envirnment : a Urban Waste Water Treatment Plant was set up in the Suth f the Island, this intrduced a technical slutin t cmbine animal and human waste; As regards Urban Regeneratin and Imprving the Quality f Life : invlving extending the lecturing capacity f the Junir Cllege by adding 8 large lecture rms, 20 tutrial rms and tw utility rms t help the Cllege accmmdate 3,500 students; As regards Prmting Sustainable Turism : Restratin and Rehabilitatin f Histrical Frtificatins f Malta and Gz prject, t imprve the presentatin and accessibility f fur f the majr histrical attractins in the cuntry. SECTION 4 EVALUATIONS AND GOOD PRACTICE IN EVALUATION The main gaps regarding evaluatin in Malta cncern the lack f an evaluatin culture in public administratin which results in very few evaluatins f public plicy being undertaken. Apart frm the ex ante evaluatin f the OP I and II, n ther relevant study cncerning the current perid have been cmpleted. The ex-ante evaluatin f OP I shwed that the ERDF and Chesin Fund prgramme is suitable fr tackling the main structural prblems and is in line with the Lisbn Strategy, the EU and natinal plicy guidelines. The Mid Term Evaluatin f OP I 2007-2013 is underway and sme results shuld be available by the end f 2010. The evaluatin will analyse the achievements f the prgramme and 17 The Maltese ecnmy: the recessin and the challenges beynd, Central Bank f Malta, May 2010 18 Accrding t interviews Malta, final versin December 2010 17 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy frmulate specific recmmendatins fr crrective measures at prgramme and prject level as regards the quality f the prcesses, prcedures and dcumentatin. The evaluatin will prvide, n the ne hand, an independent review f the prgress twards the key bjectives f the OP and, n the ther hand it will put frward recmmendatins t help the administratin t imprve achievements. The prject has been rganised in 5 main phases: inceptin; data cllectin, verificatin and analysis; finding and recmmendatins; reprting and clsure. The evaluatin relies n varius techniques in rder t btain the insight and infrmatin necessary t carry ut the analysis: dcument review; n-line questinnaires; ne t ne interviews; wrkshps and fcus grup sessins. Of the evaluatins f interventins implemented under the 2004-2006 prgramming perid, it is wrth mentining the Analysis f the effectiveness f prjects c-financed by the Structural Funds in 2004-2006. The study assessed a sample f 13 prjects financed under three f the Single Prgramme Dcument measures 19 (primarily in terms f effectiveness and impact) and prvided an analysis f mnitring and evaluatin. The main recmmendatins can be divided in tw sets: the first set were f a hrizntal nature and fcused n imprving data cllectin (analysis f data needs; availability f statistics frm already established surces such as Natinal Statistics Office, Malta Resurces Authrity etc.). The secnd set f recmmendatins were related t specific prjects and fcused n: setting up quality assurance and quality cntrl prcedures; develpment f an integrated plicy plan fr the envirnmental prjects and f a cncrete plan based n the mnitring results. Surveys were the mst cmmnly used methd. In cnclusin the evidence available n perfrmance is rather limited and it is nt pssible t identify examples f gd practice in evaluatin yet. SECTION 5 - CONCLUDING REMARKS FUTURE CHALLENGES The develpment strategy ver the 2007-2013 prgramming perid is a cntinuatin f that fllwed in the previus prgramming perid. It is fcused n develping renewable energy surces, safeguarding the envirnment, strengthening the turist sectr, increasing the ppularity f science, research and innvatin amng cmpanies and peple. Accrding t interviews with key stakehlders and the analysis carried ut, this fcus is cnsistent with lcal needs. Nevertheless, increased effrt in this directin is needed t strengthen cmpetitiveness. Sme f the majr challenges that develpment plicy Chesin Fund faces are: 19 Measure 1.1 Imprving the Envirnment Situatin; Measure 4.1 Basic Infrastructure and Develpment f the Turism Sectr; Measure 4.2 Human Resurces Malta, final versin December 2010 18 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy in relatin t Enhancing Knwledge and Innvatin, t keep n tackling the lack f innvatin and entrepreneurial culture; increasing the capability f Malta t generate new science and new technlgies thrugh: 1) investment in physical infrastructure (buildings, labratries and equipment) and by further encuraging yung peple t take up science disciplines at all educatin levels; 2) supprting investment in technlgy-intensive firms which demnstrate innvatin in the cmmercialisatin f new technlgies; as regards Safeguarding the Envirnment, t make a significant effrt bth t increase awareness f envirnmental prblems amng peple and t implement large-scale prjects with a significant envirnmental impact; a need t develp an evaluatin culture in public administratin t systematically assess the perfrmance f plicy, prmte accuntability and develp the means f guiding future strategy and its implementatin in practice; make the evaluatin reprts available and disseminate them amng stakehlders; a need t imprve cperatin between administrative bdies as well as final recipients f funding; imprve the allcatin f staff t reduce administrative bttlenecks and accelerate financial prcedures and payment systems. Malta, final versin December 2010 19 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy REFERENCES Planning and Pririties Crdinatin Department, Operatinal Prgramme I Investing in Cmpetitiveness fr a Better Quality f Life - ERDF, Chesin Fund Planning and Pririties Crdinatin Department, Operatinal Prgramme I Investing in Cmpetitiveness fr a Better Quality f Life - ERDF, Chesin Fund, Annual Implementatin Reprt, 2009 Planning and Pririties Crdinatin Department, Operatinal Prgramme I Investing in Cmpetitiveness fr a Better Quality f Life - ERDF, Chesin Fund, Annual Implementatin Reprt, 2008 Planning and Pririties Crdinatin Department, Strategic Reprt Chesin Plicy, 2007-2013, December 2009 Planning and Pririties Crdinatin Department, Natinal Strategic Reference Framewrk, Malta, 2007-2013 Malta Cuncil fr Science and Technlgy, Natinal Strategic Plan fr Research and Innvatin 2007-2010, Building and Sustaining the R&I Enabling Framewrk Natinal Strategic Plan fr Research and Innvatin 2007-2010 Central Bank f Malta, The Maltese ecnmy: the recessin and the challenges beynd, Speech given by Michael C Bnell, Gvernr, Central Bank f Malta t the Cmmittee n Ecnmic Affairs and Develpment f the Parliamentary Assembly f the Cuncil f Eurpe, May 2010 Eurpean Cmmissin, Eurpean Ecnmic Frecast, Spring 2010 EMCS LTD, Analysis f the Impact and Effectiveness f Prjects Structural Funds Prgramme fr Malta 2004 2006 EUROPEAN COMMISSION, DIRECTORATE GENERAL ECONOMIC AND FINANCIAL AFFAIRS, MALTA:MACRO FISCAL ASSESSMENT AN ANALYSIS OF THE FEBRUARY 2010 UPDATE OF THE STABILITY PROGRAMME, 7 April 2010 Natinal Cmmissin fr Sustainable Develpment, A SUSTAINABLE DEVELOPMENT STRATEGY FOR THE MALTESE ISLANDS 2006-2016, - Third Draft, March 2006 INTERVIEWS Ms. Marlene Bnnici, Directr General (Planning and Pririties C-rdinatin) - Office f the Prime Minister Ms. Carmen Galea, Head f OP I Malta, final versin December 2010 20 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Ms. Edel Vassall, Head OP II, Managing Authrity interviews in relatin pririty axis 6 Mr. Jnathan Vassall, Senir Manager OP I, Managing Authrity interviews in relatin pririty axis 5 Mr. Anthny Rizz, CEO, Malta Resurces Authrity Dr. Ing. Christpher Ciantar, Pemanent Secretary, Ministry fr Resurces and Rural Affairs Dr. Nichlas Sammut, CEO, Malta Cuncil fr Science and Technlgy Dr. Jennifer Cassigena Harper, Directr, Malta Cuncil fr Science and Technlgy Ms. Marie Luise Mangin, Head f Turism and Sustainable Develpment Unit Mr. Marc Abela, Chief Officer, Malta Enterprise Mr. Jseph Tanti, CEO, Malta Chamber f Cmmerce, Enterprise and Industry Mr. Alfred Camilleri, Permanent Secretary, Ministry fr Finance, Ecnmy and Investment Mr. Gerge Schembri, CEO, Malta Htels and Restaurants Assciatins Mr. David Suttn, Chief Officer, Malta Transprt Mr. Christpher Farrugia, Senir Manager, Malta Transprt Mr. Rbert Zerafa, Architect and Civil Engineer, Malta Transprt Prfs. Richard Muscat, Pr- Rectr fr Research and Innvatin, University f Malta Dr. Ernest Cachia, Dean f ICT and Head f Cmputer Science, University f Malta Dr. Ing. Stephen Abela, University f Malta TABLES See Excel file fr Tables 1, 2, 3 and 4. Table 1: Reginal disparities and trends Table 2: Macr-ecnmic develpments Table 3: Financial allcatin by main plicy area Table 4: Cmmitments by main plicy area Malta, final versin December 2010 21 f 22

Expert Evaluatin Netwrk Task 2: Cuntry Reprt n Achievements f Chesin Plicy Annex Table A - Expenditure by pririty axis (Year 2009) Surce: AIR 2009 Malta, final versin December 2010 22 f 22