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Annals of “Dunarea de Jos” University of Galati
Fascicle I. Economics and Applied Informatics
Years XXVI – no2/2020
ISSN-L 1584-0409 ISSN-Online 2344-441X
www.eia.feaa.ugal.ro
DOI https://doi.org/10.35219/eai15840409126
Integrated Territorial Investments - Current and Future
Solutions for Sustainable Development
Laura-Delia ANGHELUTA, Silvius STANCIU
A R T I C L E I N F O
A B S T R A C T
Article history:
Accepted August 2020
Available online August 2020
The aim of the article is the analysis of one of the newest instruments of the Cohesion Policy
for the 2014-2020 period, namely the integrated territorial investments (ITI). The
advantages offered by ITI to stimulate the integrated approach of the different spheres: the
functional territorial one, the implementation of a “bottom-up” strategy with the delegation
of tasks at local level and, last but not least, the combination of European and investment
funds from several priority axes of operational programmes, converge towards a further
use of this instrument in the future programming period 2021-2027. The research was
based on different models of ITI in the European Union, an analysis of the operation and
results being made for ITI Danube Delta.
© 2020 EAI. All rights reserved.
JEL Classification
F30, F63, O18, R58
Keywords:
Integrated territorial investments,
Local development, European
funds
1. Introduction
The issue of the use of European funds and their impact on the economic growth in the Member
States of the European Union (EU) is a constant concern of the various European or national institutions.
Thus, the effectiveness of interventions is linked, on the one hand, to the support at national level, but also to
the sectoral approach and support for underdeveloped regions as part of EU Cohesion Policy.
The confrontations the EU must face (Brexit, refugee issues, increase of the competitiveness of
developed Member States for value-added areas, diversity of needs, etc.) have led to the need for an
integrated approach leading to the EU's strategic development (Stanciu, 2016). The territorial cohesion
objective introduced by the Lisbon Treaty (adopted in 2009), the Europe 2020 Strategy, the Territorial
Agenda of the European Union 2020 promotes the policy of area-based development, in order to streamline
activities and synergy types of interventions.
The European Commission's assessments anticipated development disparities at EU level by
proposing for the 2014-2020 period two innovative instruments for the Cohesion Policy: Community-Led
Local Development (CLLD) and Integrated Territorial Investment. These were regulated by Regulation (EU)
No. 1303/2013 laying down common provisions, but also through regulations specific to the European
Structural and Investment Funds (ESIF).
The paper treats Integrated Territorial Investments as a tool for implementing territorial strategies
based on a well-established territory (urban, urban-rural, etc.) with an integrated territorial development
strategy; a series of well-defined actions that are found in the operational programmes funded from ESI
Funds but also governance mechanisms in order to manage ITI.
Through the Partnership Agreement signed by Romania with the European Commission, only one ITI
was designated at national level, respectively the specific territory of the Danube Delta Biosphere Reserve -
ITI Danube Delta. The research followed the management of the ITI Danube Delta, but also the absorption
capacity of European funds.
2. Literature review
The current 2014-2020 programming period has introduced a new tool to implement the Cohesion
Policy at EU Member State level. Thus, the approach of integrated territorial investments is found in the three
regulations of the European Parliament and the EU Council of December 2013, respectively in art. 36 of the
Regulation No. 1303/2013 laying down common provisions, art. 7 of the Regulation no. 1301/2013 on the
European Regional Development Fund and art. 12 of the Regulation no. 1304/2013 on the European Social
Fund.
, Dunarea de Jos University of Galati, Romania. E-mail address: sstanciu@ugal.ro (S. Stanciu - Corresponding author)
201
According to the Partnership Agreement for Romania - 2014-2020, Romania uses the ITI instrument
in the Danube Delta Biosphere Reserve, this being defined as a unique territory with specific characteristics:
"scarce and isolated population, specialization and economic vulnerability, unsatisfactory access to services,
etc." (Partnership Agreement, 3.1.2. Integrated Territorial Investment, p. 255).
European Union policies with direct applicability on territorial development and partnership
modalities have also been the basis for this research.
Being a new tool introduced by the EU, the literature on ITI is quite limited, but there are a number of
specific studies and analyses carried out by Member States that use this tool, but also a number of reports by
European institutions in order to analyse the efficiency of ITI in the 2014-2020 period and its use also for the
2021-2027 period.
3. Methods
The paper is based on a series of reports, studies and research, the information being obtained
mainly from the official EU websites ((https://europa.eu, http://www.europarl.europa.eu) or other
specialized sites (https://www.researchgate.net).
Data on the ITI situation in the EU was taken from https://cohesiondata.ec.europa.eu, and
information on the ITI Danube Delta from its official website http://www.itideltadunarii.com. At the same
time, information was processed from the websites with attributions in the field - Ministry of European Funds
(mfe.gov.ro or http://www.fonduri-ue.ro), the Ministry of Public Works, Development and Administration
(https: / /www.mlpda.ro), the Ministry for Transport (http://www.mt.gov.ro) and the Ministry of Agriculture
and Rural Development (http://www.madr.ro).
Furthermore, the analysis was based on EU regulations on European funds (https://eur-
lex.europa.eu).
The analysis followed the approach of some Member States on the new ITI instrument and, also, the
existing results so far in Romania on the implementation and operation of ITI.
4. Results
Starting from a series of studies on EU policies and analysing the objectives of the Europe 2020
Strategy for smart and sustainable growth and favourable for inclusiveness, it is found that the objectives of
EU Cohesion Policy for 2014-2020 aim to strengthen the performance by focusing on results and maximizing
the impact of funds through thematic focus, having a strategic and integrated approach (Stanciu, 2017).
The new territorial development instruments proposed by the EU for the 2014-2020 period - ITI and
CLLD - are innovative and quite complex, they can coexist in the same space (CLLD can be part of an ITI),
differing by participatory size and geographical application (CLLD applies locally, while ITI addresses wider
territories) and combining funding flows.
The two instruments play an important role in adapting to demographic change and reducing
interregional development imbalances. Thus, although ITI was originally intended to be limited to urban
areas, it has applicability in urban neighbourhoods, metropolitan areas, urban-rural, sub regional or cross-
border.
The defining elements of an ITI focus on a well-defined territory based on an integrated territorial
development strategy, a set of actions to be implemented and its own governance mechanism for ITI
management.
The advantages offered by ITI concern the possibility of allocating and using European structural and
investment funds from several priority axes of the operational programmes for the implementation of the
actions of the integrated territorial strategies. Thus, in addition to Cohesion Policy funds, the European
Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF)
can also be used.
ITI combines the investment priorities set out in the operational programmes with the needs
identified by local communities, ensuring, in practice, a synergy between European funds and local needs.
The combination of infrastructure investments funded by the European Regional Development Fund with
investments in human capital using the European Social Fund is relevant for the sustainable development of
an ITI intervention area, just as the EAFRD and the EMFF can be combined to support the urban-rural
development of the areas of an ITI.
The territorial approach of interregional policy through the application of intervention packages to
certain types of territories and the diversification of actions based on the characteristics of some areas has
become one of the concerns of regional policy, the selection of areas being a challenge for Member States.
Under the partnership agreements with the EU, ITI tools are being implemented at the level of 20 Member
States with various implementation mechanisms based on different geographical, thematic, financial and
organizational approaches. Thus, ITI supports functional urban areas in Poland, the Czech Republic, Slovakia,
while in the United Kingdom, Germany and Belgium it applies only in certain regions. Finland implements "6
Cities Strategy" supporting ITI in Helsinki, Vantaa, Espoo, Tampere, Oulu and Turku.
202
The financial dimension of ITI allocations consists of 13.6 billion Euros, the highest percentage being
from the European Regional Development Fund (85.51%), while 12.32% is the European Social Fund and
2.17% the Cohesion Fund (Ionescu et al, 2019).
At the same time, it should be noted that at EU level there are 209 sustainable integrated urban
development strategies used as ITIs and 120 ITIs implementing their own strategy. According to the
requirements of the European Commission, Member States had to allocate at least 5% of the Cohesion Policy
budget for the implementation of the ITI, each setting its own rules for the selection of areas supported for
integrated actions and the indicative allocation in the Partnership Agreements.
Poland stands out due to the largest amount allocated to territorial instruments (over EUR 6 billion)
allocated for 24 strategies, most of which are located around regional capitals, 6 being metropolitan areas.
Spain has 128 territorial and urban strategies, while Romania has focused on a single homogeneous territory
- the Danube Delta Biosphere Reserve which includes the territories of Tulcea and Constanta counties.
The integrated strategy for the sustainable development of the Danube Delta has been implemented
with the support of the World Bank, and the action plan includes interventions and implementation
mechanisms that allow the use of all European structural and investment funds. The strategy is based on five
pillars meant to ensure the development of the territory, these being:
✓ protection of the environment and natural resources;
✓ improving the economy;
✓ improving connectivity;
✓ providing public services;
✓ promoting efficiency, accessibility and sustainability (http://www.itideltadunarii.com).
The choice of the Danube Delta Biosphere Reserve was based on the specific characteristics of the
territory, namely the low population density and isolation, low access to services, poor economic
development.
The territory targeted by ITI Danube Delta includes the city of Tulcea, the cities of Babadag, Isaccea,
Macin and Sulina, 29 communes from Tulcea county and 4 communes from Constanta county.
To ensure the governance mechanisms of ITI in order to organize, fund, monitor and jointly
coordinate the implementation of the Integrated Strategy and the allocated funds, the Association for
Intercommunity Development - ITI Danube Delta (AID-ITI DD) was created. AID ITI DD is a legal entity under
private law, with public utility status, which has as associates the representatives of 38 administrative-
territorial units, respectively the county councils of Constanta and Tulcea, 5 urban and 33 rural
administrative territorial units.
The Quadripartite Protocol concluded between the Ministry of European Funds, the Ministry of
Regional Development and Public Administration, the Ministry of Agriculture and Rural Development and the
Association for Intercommunity Development - ITI Danube Delta, establishes the role of AID ITI DD to
coordinate the implementation of the strategy in the territory, supporting the Managing Authorities in order
to implement the ITI mechanism, monitoring the implementation of projects and ensuring the visibility and
permanent public information specific to the implementation of the actions of the Integrated Sustainable
Development Strategy.
The total estimated budget allocated for the ITI Danube Delta is approximately EUR 1.11 billion from
the European structural and investment funds to which is added the national co-funding, the situation being
summarized in the following table.
Table 1. 2014-2020 financial allocation for ITI Danube Delta
Programme
Financial allocation
(mil. euros)
ESI Fund
Large Infrastructure Operational Programme
(LIOP)
407.64
Cohesion Fund,
European Regional Development
Fund
Regional Operational Programme (ROP)
358.1
European Regional Development
Fund
Competitiveness Operational Programme (COP)
60
European Regional Development
Fund
Human Capital Operational Programme (HCOP)
60
European Social Fund
Operational Programme Administrative
Capacity (OPAC)
16
European Social Fund
Technical Assistance Operational Programme
(TAOP)
5
European Regional Development
Fund
National Rural Development Programme
(NRDP)
168, including the
national contribution
European Agricultural Fund for Rural
Development
European Maritime and Fisheries Fund (EMFF)
37
European Maritime and Fisheries
Fund
Source: Authors, by using http://www.itideltadunarii.com
203
The area of intervention of the funding programmes targets both local public authorities and
institutions, as well as the economic environment or civil society, including the partnerships established
between them. Regarding the attraction of the allocated funds, the situation can be seen in table no. 2
Table 2. Situation of use of ITI Danube Delta funds on 30 April 2020
Programme
Allocation (ESIF+
state budget) LEI
ITI allocation
EUR
Number
of
contracted
projects
Value of
contracted
projects
(ESIF+SB) LEI
%
contracte
d projects
Amounts
reimbursed
LEI
Absorpti
on rate
%
Regional Operation
Programme
2.136.190.680
446.034.006
293
1.270.399.655
59.47
296.347.225
23.33
Large Infrastructure OP
2.141.484.283
447.997.058
29
2.337.847.872
109.17
443.406.934
18.97
OP for Fisheries and
Maritime Affairs
157.882.000
41.099.527
53
114.209.814
72.34
20.806.448
18.22
Administrative
Capacity OP
35.350.000
16.000.000
4
4.310.752
12.19
551.900
12.80
Competitiveness OP
56.873.268
60,000,000
4
7.564.335
13.30
2.632.986
34.81
Human Capital OP
165.668.150
60.000.000
7
62.892.714
37.96
7.804.572
12.41
Technical Assistance
OP
23.500.000
5.000.000
2
28.015.022
119.21
11.230.206
40.09
National Rural
Development
Programme
809.599.120
168.000.000
653
659.516.651
81.46
291.628.720
44.22
Source: Authors, by processing data from http://www.itideltadunarii.com;
EUR BNR exchange rate from 30.04.2020 = 4,8421 lei
There is a low rate of absorption of ESI funds mainly due to cumbersome procedures for launching
funding, poor preparation of beneficiaries, but also the lack of resources and cultures in the development and
implementation of European projects (figure 1)
Figure 1. Absorption rate of ESI funds as at 30 April 2020
Source: Authors, by using ADI ITI Delta Dunării (2020),
It is also observed that the largest allocations are from the Regional Operational Programme and the
Large Infrastructure Operational Programme, which involves the involvement of local public authorities in
the preparation and implementation of projects involving infrastructure investments. Bureaucracy of public
authorities, application and compliance with public procurement procedures to ensure the technical
documentation needed to carry out investment projects often lead to delays in applying for funding.
At the same time, in addition to the overall analysis of the operational programmes, the number of
axes specific to each programme that is applicable in the ITI territory must be taken into account. Thus, in the
case of ROP there are 7 specific axes where funding can be requested, which leads to delays in launching,
evaluating and subsequently implementing projects.
According to the available information of AID ITI Danube Delta, the contracts concluded locally
within NRDP and ROP can be divided into three categories, depending on their size:
✓ between 100.000 – 999.9999 Eur: 5 administrative territorial units;
✓ between 1.000.000 – 9.999.999 Eur: 27 administrative territorial units;
✓ between 10.000.000 – 99.999.999 Eur: 5 administrative territorial units.
The situation of the contracts on each administrative-territorial unit can be ascertained from figure2.
23.33%
18.97%
18.22%
12.80%
34.81%
12.41%
40.09%
44.22%
Regional Operation Programme
Large Infrastructure OP
OP for Fisheries and Maritime Affairs
Administrative Capacity OP
Competitiveness O P
Human Capital OP
Technical Assis tance OP
National Rural D evelopment Programme
204
0 5,000,000 10,000,000 15,000,000 20,000,000
I.C Brătianu
Grindu
Smârdan
Crișan
Sf. Gheorghe
Jijila
Văcăreni
Luncavița
Greci
Niculițel
Somova
Ceatalchioi
Pardina
Chilia Veche
Maliuc
Nufăru
Bestepe
Mahmudia
M. Kogălniceanu
Valea Nucarilor
Mihai Bravu
Sarichioi
Slava Cercheză
Babadag
Ceamurlia de Jos
Jurilovca
Murighiol
C.A. Rosetti
Sulina
Istria
Sacele
Corbu
Măcin
Isaccea
Frecățel
Mihai Viteazu
256,013
256,013
425,770
823,446
762,303
2,676,359
1,488,376
4,161,236
2,819,596
3,870,319
5,888,896
1,850,925
1,253,481
6,802,730
2,253,631
3,698,553
1,637,286
5,165,636
4,594,636
5,587,138
3,242,783
5,993,018
2,065,362
7,444,284
4,657,089
4,484,741
6,786,906
2,247,285
8,733,772
8,680,807
8,377,923
9,894,012
16,891,088
12,719,632
10,698,005
11,325,234
Eur
Figure 2. NRDP and ROP contracts at ITI administrative-territorial units
Source: Authors, information processed based on data from AID-ITI Danube Delta (2020)
Regarding the municipality of Tulcea, the contracted amount is EUR 90.740.841, the funds coming
from the seven axes of the Regional Operational Programme.
The data analysis shows that there is a low level of contracting at the ITI level, but the evaluation
carried out by the Directorate-General for Internal Policies of the European Parliament in 2019 on
"Integrated territorial investment as an effective instrument of the Cohesion Policy" reveals similar situations
for the rest of the Member States using the ITI instrument.
Thus, according to the Commission's data, from approx. EUR 9.2 billion planned by EU for spending
on ITI integrated sustainable urban development, by the end of 2018 approx. EUR 1.5 billion (16% of the
205
total) were spent, while for ITI in urban or urban-rural areas, the percentage was 13% of the planned EUR 6
billion.
The analysis carried out in the middle of the implementation period shows that it is difficult to
establish the correlation between the specific characteristics of the ITI and the financial performance, but it
brings some useful results:
✓ there is no uniform model for the ITI approach at EU level and no exchange of best practices;
✓ acceleration of implementation after a delayed start due to boosting design, selection and
implementation activities (the experience of beneficiaries of European funds is important);
✓ the benefits of integrating European funds and areas by combining funds that address complex social
and economic problems;
✓ cooperation in defining and designing the integrated development strategy;
✓ mobilization of potential beneficiaries;
✓ strategic projects are difficult to integrate into strategies if they have not been considered since their
development;
✓ communication and visibility are not good enough etc.
5. Conclusions
The analysis shows the usefulness of the new instrument of Cohesion Policy, respectively the
Integrated Territorial Investments, but its effectiveness has not yet been able to be concretely demonstrated.
Although the start-up of ITI implementation has been difficult due to the time needed to develop
integrated territorial strategies and launch operations, the need for funding is still trying to make up for lost
time. At the same time, the monitoring and evaluation structures encountered delays in preparing the
procedures for selection, contracting, information and mobilization for potential beneficiaries.
However, the integration of funding sources in order to approach ITI for territorial development is
particularly useful.
The perspective of the implementation of the ITI instrument must start from the elaboration of the
integrated territorial strategies and strategic projects in parallel with the elaboration of the operational
programmes. Also, a better mobilization and information of the beneficiaries is especially useful as the
strategy has a local character and must respond to the direct local needs of the territory.
The experience gained in the programming period 2014-2020 can be shared at EU level by creating a
network of ITI structures and developing good practice guides useful for Member States that want to
introduce ITI or develop other ITIs at national level.
The experience of the ITI Danube Delta is particularly useful, the established territory requiring
massive investments both in infrastructure and in the creation of new jobs. Identifying new possible
territories to make Integrated Territorial Investments requires a realistic analysis, given that there have been
several such initiatives at national level.
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