ROMANIA Reimbursable Advisory Services Agreement on the Romania Territorial Impact Assessment (P172820) Output 3 – Report with recommendations on policy options and pathways to operationalize and implement the territorial impact assessment tool within MDPWA and across other relevant sector ministries April 2023 Disclaimer This report is a product of the International Bank for Reconstruction and Development/the World Bank. The findings, interpretation, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. This report does not necessarily represent the position of the European Union or the Romanian Government. Copyright Statement The material in this publication is copyrighted. Copying and/or transmitting portions of this work without permission may be a violation of applicable laws. For permission to photocopy or reprint any part of this work, please send a request with the complete information to either: (i) Ministerul Dezvoltării, Lucrărilor Publice și Administrației (Str. Apolodor 17, Bucharest, Romania); or (ii) the World Bank Group Romania (Vasile Lascăr Street, No 31, Et 6, Sector 2, Bucharest, Romania). Acknowledgements This report was delivered in March 2023 under the Reimbursable Advisory Services Agreement on the Territorial Impact Assessment, signed between the Ministry of Development, Public Works and Administration and the International Bank for Reconstruction and Development on December 9, 2019. The report has been developed under the guidance and supervision of Christoph Pusch (Practice Manager, Urban and Disaster Risk Management, Europe and Central Asia) and Anna Akhalkatsi (Country Manager, Romania and Hungary). The report has been prepared by a team coordinated by Ellen Hamilton, (Lead Urban Specialists) and consisting of Carli Venter (Senior Urban Development Specialist), Cristina Zamfir (Public Sector Expert) and George Moldoveanu (Information Assistant). Expert analysis were conducted by a team from ÖIR GmbH. The team would like to express its gratitude for the excellent cooperation, guidance, and timely feedback provided by the representatives of the Ministry of Development, Public Works and Administration, in particular to the Minister Attila Cseke, General Director Alexandru Soare, Director Liviu Băileșteanu, Head of Unit Radu Necșuliu, Head of Unit Bogdan Ghinea, Amalia Virdol, Beniamin Stoica-Fuchs, Georgiana Toth, Alina Huzui, Bogdan Micu, Cătălina Păun and Ioana Hangiu. 2|P a g e Contents 1 Introduction .................................................................................................................................................... 8 1.1 Background information ................................................................................................................................. 8 1.2 Scope and structure of this report ................................................................................................................ 10 2 Overview of TIA Quick Check methodology adapted to the Romanian context .......................................... 12 2.1 General ESPON TIA Quick Check methodologies and tools (OIR) ................................................................. 12 2.2 Adaptation of the TIA Quick Check methodology for Romania .................................................................... 13 2.3 Inputs for a manual for future users ............................................................................................................. 14 3 Pilot application of the TIA Quick Check: National Investment Program “Anghel Saligny� ......................... 20 3.1 Overview of the Program selected for TIA Quick Check ............................................................................... 20 3.2 Methodological approach ............................................................................................................................. 22 3.3 Potential territorial impacts .......................................................................................................................... 22 3.3.1 Identifying the potential territorial effects in terms of economic, societal, environmental and governance-related aspects – drafting a conceptual model...................................................... 22 3.3.2 Picturing the potential territorial effects through indicators ........................................................... 23 3.3.3 Judging the intensity of the potential effects ................................................................................... 24 3.3.4 Calculating the potential “regional impact� – Combining the expert judgement with regional sensitivity .......................................................................................................................................... 24 3.3.5 Mapping the potential territorial impact .......................................................................................... 24 3.3.6 Economic performance ..................................................................................................................... 24 3.3.7 Employers – Real estate transactions ............................................................................................... 26 3.4 Expected environmental effects ................................................................................................................... 27 3.4.1 Natural land use ................................................................................................................................ 27 3.5 Expected societal effects .............................................................................................................................. 29 3.5.1 Young demography ........................................................................................................................... 29 3.5.2 School population ............................................................................................................................. 30 3.6 Expected governance effects ........................................................................................................................ 31 3.6.1 Local authority budgets .................................................................................................................... 31 3.6.2 New dwellings completed ................................................................................................................. 33 3.6.3 Water supply network – households ................................................................................................ 34 3.6.4 Sewage network................................................................................................................................ 35 3.7 Conclusions and policy recommendations ................................................................................................... 37 3.7.1 Priorities and objectives.................................................................................................................... 37 3.7.2 Funding focus .................................................................................................................................... 38 3.7.3 Goals conflicts ................................................................................................................................... 38 3.7.4 Long-term safety of investments ...................................................................................................... 38 3.8 Lesson learned from the TIA exercise ........................................................................................................... 39 3|P a g e 4 Conclusions. Next steps for integrating the TIA Quick Check into policymaking ......................................... 41 4.1 Integrating the TIA Quick Check methodology into Policy formulation ....................................................... 41 4.2 Institutional roles and responsibilities .......................................................................................................... 42 4.3 Next steps ..................................................................................................................................................... 43 5 Bibliography .................................................................................................................................................. 44 4|P a g e List of Figures Figure 1. Exposure x territorial sensitivity = territorial impact ........................................................................ 12 Figure 2. Input sheet ........................................................................................................................................ 14 Figure 3. Database ........................................................................................................................................... 15 Figure 4. Excel tool, sheet “Map� .................................................................................................................... 16 Figure 5. Excel tool, sheet “Control� ................................................................................................................ 18 Figure 6: VB script – map painting ................................................................................................................... 19 Figure 7: VB script – coloring ........................................................................................................................... 19 Figure 8. Workshop findings: Systemic picture................................................................................................ 23 Figure 9. Result of the expert judgement: economic performance affected by the Anghel Saligny measures ........................................................................................................................................... 25 Figure 10. Result of the expert judgement: employers in the real estate transactions sector affected by the Anghel Saligny measures ............................................................................................................ 26 Figure 11. Result of the expert judgement: natural land use affected by the Anghel Saligny measures .......... 28 Figure 12. Result of the expert judgement: young demography affected by the Anghel Saligny measures ........................................................................................................................................... 29 Figure 13. Result of the expert judgement: school population affected by the Anghel Saligny measures ....... 30 Figure 14. Result of the expert judgement: local authority budgets affected by the Anghel Saligny measures ........................................................................................................................................... 32 Figure 15. Result of the expert judgement: new dwellings completed affected by the Anghel Saligny measures ........................................................................................................................................... 33 Figure 16. Result of the expert judgement: water supply network (households) affected by the Anghel Saligny measures .............................................................................................................................. 34 Figure 17. Result of the expert judgement: sewage network affected by the Anghel Saligny measures ......... 36 Figure 18. When to utilize the TIA Quick Check methodology in the Policy cycle ............................................. 41 List of Maps Map 1. “Anghel Saligny� Program, distribution of financing applications by county, as of November 8, 2021 .............................................................................................................................................. 20 Map 2. Economic performance (GDP/capita) affected by the Anghel Saligny measures – expert judgement: weak positive effect ...................................................................................................... 25 Map 3. Employers in the real estate transactions sector affected by the Anghel Saligny measures – expert judgement: strong positive effect ......................................................................................... 27 Map 4. Natural land use affected by the Anghel Saligny measures – expert judgement: weak negative effect .................................................................................................................................. 28 Map 5. Young demography affected by the Anghel Saligny measures – expert judgement: strong positive effect ................................................................................................................................... 30 Map 6. School population affected by the Anghel Saligny measures – expert judgement: strong positive effect ................................................................................................................................... 31 5|P a g e Map 7. Local authority budgets affected by the Anghel Saligny measures – expert judgement: strong positive effect ........................................................................................................................ 32 Map 8. New dwellings completed affected by the Anghel Saligny measures – expert judgement: strong positive effect ........................................................................................................................ 34 Map 9. Water supply network (households) affected by the Anghel Saligny measures – expert judgement: strong positive effect ..................................................................................................... 35 Map 10. Sewage network affected by the Anghel Saligny measures – expert judgement: strong positive effect ................................................................................................................................... 36 List of Boxes Box 1. Best practices and take-aways from other countries that have successfully performed territorial impact assessments and impact forecasting of infrastructure investments ...................... 9 Box 2. Recommendations for a gradual introduction of ex-ante foresight territorial impact assessments into policymaking, at national and local levels .............................................................. 9 6|P a g e Abbreviations and Acronyms ARTS Assessment of Regional and Territorial Sensitivity (ESPON ARTS project) CLC Corine Land Cover EEA European Environment Agency ESPON European Observation Network for Territorial Development and Cohesion EU European Union GDP Gross Domestic Product GIS Geographic Information System IPCC Intergovernmental Panel on Climate Change LAU Local Area Unit MDPWA Ministry of Development, Public Works and Administration NUTS Nomenclature des Unités territoriales statistiques/Nomenclature of Territorial Units for Statistics (geocode standard for referencing the administrative division of countries for statistical purposes) OECD Organization for Economic Co-operation and Development OIR Austrian Institute for Spatial Planning (ÖIR) PNDL National Program for Local Development PSIA Poverty and Social Impact Analysis RAS Reimbursable Advisory Services RON Romanian leu ROP Regional Operational Programme SECHSA Strategic Environmental, Social and Cultural Heritage Assessment STeMA Sustainable Territorial economic/environmental Management Approach TAU Territorial Administrative Unit TIA Territorial Impact Assessment VBA Visual Basic for Applications (programming language) WB World Bank Legend Effects of the directives – color code Legend – direction of effects Positive effects Increase Minor positive effects Neutral Decrease Minor negative effects Negative effects 7|P a g e 1 Introduction 1.1 Background information P 1. The Romanian Ministry of Development, Public Works and Administration (MDPWA) is currently implementing a project aimed at “improving the capacity to fundament decision taken at Ministry level and applying evidence-based policies�1, initiated in October 2019. As part of the project, the MDPWA will develop a territorial impact assessment (TIA) tool, to substantiate and support, with much more precise information, the decision-making process regarding the design and implementation of national policies and investment programs in Romania. The intention is for the TIA tool to estimate the territorial impacts, based on procedures similar to those used at European level. P 2. In this context, the World Bank has provided Reimbursable Advisory Services (RAS) to MDPWA, including analytical products, capacity building and practical recommendations for the use of strategic foresight and TIA methodologies at national and local levels. As outlined in the amended agreement, Output 3 of the TIA RAS “Report with recommendations on policy options and pathways to operationalize and implement the territorial impact assessment tool within MDPWA and across other relevant sector ministries�, is one of the deliverables as part of Component 2, which comprised the following activities (with c and d captured in this report): a) Conduct a study of three (3) best practice case studies in relevant EU member states that have successfully performed territorial impact assessments and impact forecasting of infrastructure investments; b) Provide recommendations to MDPWA for the improvement of local development strategies based on the case studies conducted in (a); c) Provide support and capacity building to MDPWA in its pilot application of the territorial impact assessment tool in the context of a MDPWA’s program selected by the Client, reviewing the results of such pilot application; and d) provide recommendations on policy options and pathways to operationalize and implement the territorial impact assessment tool within MDPWA and across other relevant sector ministries. P 3. The key results to date are summarized in the below paragraphs. (a) Review of international practices with regards to the TIA tools and methodologies P 4. Output 2a2 under the TIA RAS presents the definitions, types, and use of TIA tools and methodologies to support evidence-based policymaking. It provides an overview of current TIA tools which considers their rationale, strengths and weaknesses to help MDPWA make a better-informed decision in selecting which TIA tool (or combination of tools) to use in the broad evaluation of territorial investments in Romania. While it does not exhaustively cover the methodology of each specific TIA tool, it provides a brief overview of their strengths and weaknesses. As a first step, it is important to establish what the key features, advantages and disadvantages are offered and differ between existing assessment tools. P 5. To explore the use of TIA methodologies in the Romanian context, a review of international practices was conducted by the WB team. The review revealed that there are several examples of successful foresight assessments that have been used to inform policymaking in different countries. These assessments have been used to anticipate changes in the economic, social, and environmental landscape, and to develop strategies responsive to these changes. By learning from these examples, Romania can develop its own approach to TIA 1Project “Improving the framework for substantiation and evaluation of public policies for territorial development�, code SIPOCA 713. Further information available at https://www.mdlpa.ro/pages/proiectsipoca713 2Report available upon request: World Bank. (2021). Report on the practice of territorial impact assessment and impact forecasting of infrastructure investment, with three case studies. 8|P a g e that is tailored to its specific context and needs. This could involve the development of new tools and methodologies, as well as the establishment of partnerships with relevant stakeholders to ensure that the assessments are conducted in a collaborative and inclusive manner. Box 1. Best practices and take-aways from other countries that have successfully performed territorial impact assessments and impact forecasting of infrastructure investments Case Study 1: SECHSA in the Georgia Regional Development Project The Georgia Regional Development Project showcases an example of mainstreaming cultural heritage, natural environment and social outcomes into a territorial impact assessment. The assessment engages in a deep qualitative assessment of the status of cultural heritage sites as part of its analysis. This is supplemented by environmental baseline conditions, which comprise assessment of hazardous geological processes, nature reserves, protected areas, and biodiversity. Following, it takes a view towards local economic development with a socioeconomic analysis component, which considers healthcare, education and economic activity. The case incorporates a number of forward-looking elements in the project design and consideration of risk elements. Case Study 2: STeMA-TIA model to the Latium 2014-2020 ROP The application of the STeMA-TIA tool in the Latium region is part of a nation-wide deployment of the STeMA TIA tool by academic researchers to evaluate ROPs at large across Italy. It showcases the potential of instilling a culture of uniform evaluation to accompany national policies and programs. It also signals the potential to deploy such a tool to analyze territorial impact of policies and programs across regions in Romania, if desired. However, the STeMA model may not be the most feasible or time-sensitive option. If a STeMA 3.0 model is pursued, using the tool would require access to the patent and training for the analysts involved. Case study 3: PSIA to the Santa Cruz Corridor Connector Project The application of PSIA to the Santa Cruz Corridor Connector Project in Bolivia supported the identification and integration of social and environmental realities within a territorial project. It undertakes a deeply qualitative analysis through field interviews and consultations with individuals and local organizations. The methodological simplicity of this particular assessment makes it no less comprehensive or insightful. Rather, it brings the focus on the quality of well-being determined through interview techniques, suggesting that while complex and sophisticated tools can be useful, they may not always the most effective or insightful for gauging social conditions, needs and wants of individuals and communities. Source: Summary of the case studies presented in (World Bank, 2021) (b) Recommendations to MDPWA for the improvement of local development strategies P 6. Output 2b3 under the TIA RAS, examines the lessons learned with regards to the design and implementation of territorial and local development strategies in Romania, and provides recommendations for improving the policymaking, in correlation with the results of the Output 2a. The report suggests that ex-ante foresight methodologies and tools covering territorial impacts could be gradually introduced from the central government, line ministries and outwards, for policy reforms, strategies and investment programs. At subnational levels, local authorities could be encouraged to incorporate basic foresight tools, with simple approaches such as scenario planning. Box 2. Recommendations for a gradual introduction of ex-ante foresight territorial impact assessments into policymaking, at national and local levels Despite the strategic and methodological framework created at the European Union’s (EU) level for territorial and local development, there is still room for improvement in the Romanian strategic planning process. “The formulation of regional and local strategies has been driven primarily by the objective of obtaining external 3Report available upon request: World Bank. (2023). Report with specific recommendations for improving the local development strategies based on international best practice. 9|P a g e funding, rather than being founded upon a comprehensive evaluation of local demands and potential for growth. Many local plans exhibit detailed descriptions of local issues but fail to place sufficient emphasis on concrete priorities. Moreover, there is minimal alignment between strategic directions, actual needs, and project proposals, leading to a mere enumeration of projects without associated budgetary allocations. Numerous plans lack a monitoring and evaluation system capable of assessing the effectiveness of proposed strategies and projects. Given these shortcomings in basic strategic planning practices at the local level, it is at this stage most appropriate to consider territorial impact approaches that can be conducted at national level. At subnational levels, local authorities could be encouraged to incorporate basic foresight tools, with simple approaches such as scenario planning, which can serve as community conversation approaches rather than necessarily technical exercises.� Source: (World Bank, 2023) P 7. Some preparatory work is deemed necessary to successfully integrate TIA tools and methodologies into policymaking. This includes ensuring complete, up-to-date, and robust databases. Additionally, raising awareness of the benefits of ex-ante foresight TIA tools through various means such as workshops and training sessions, and engaging stakeholders in the design and implementation of TIA tools is crucial. Producing methodological guidelines to ensure consistency and high-quality results can also aid in the successful implementation of the TIA. (c) Provide support and capacity building to MDPWA in its pilot application of the territorial impact assessment tool in the context of a national program for local development P 8. The MDPWA identified the ESPON TIA tool (and particularly the latest online version referred to as the Quick Check tool) for application in Romania. An initial test application to demonstrate the use of the tool to MDPWA officials has been executed with direct support from ESPON. In the context of the TIA RAS, the Austrian Institute for Regional Studies and Spatial Planning supported the adaptation of the TIA Quick Check methodology (not the online tool) for application at LAU level in Romania. Training was provided to the MDPWA representatives for its future use. (d) Provide recommendations on policy options and pathways to operationalize and implement the territorial impact assessment tool within MDPWA and across other relevant sector ministries. P 9. The MDPWA, with support from the WB and OIR technical teams, coordinated a first TIA Quick Check for the National Investment Program “Anghel Saligny�. The results of the pilot application are included in this report, along with the lessons learned and recommended policy options and pathways to operationalize and implement the TIA Quick Check methodology in Romania. 1.2 Scope and structure of this report P 10. This report represents the final result of the project, respectively a TIA Quick Check methodology adapted to the Romanian context. The methodology was successfully piloted in March 2023 and facilitated the identification of possible improvements to the design of the National Investment Program “Anghel Saligny�. Further efforts are needed however to embed TIA methodologies into policymaking in Romania, within MDPWA and potentially across other relevant sector ministries (recommendations are provided in this report). 10 | P a g e P 11. The report is structured in three main sections, as follows: • Chapter 2. “Overview of the TIA Quick Check methodology adapted to the Romanian context� introduces the supporting calculation and mapping package developed for Romania, along with general guidance for its future users. • Chapter 3. “Pilot application of the TIA Quick Check: National Investment Program Anghel Saligny� presents the potential territorial impacts of three selected measures of the Program, in terms of expected economic, environmental, societal and governance effects. Some general recommendations for improving the Program are included, as emerged from debates and qualitative analyses, based on a TIA workshop. • Chapter 4. “Conclusions. Next steps for integrating the TIA Quick Check tool into policymaking � provides a summary of the report’s key findings and recommendations. This section emphasizes the importance of integrating the TIA Quick Check into policymaking and identifies next steps for achieving this goal. 11 | P a g e 2 Overview of TIA Quick Check methodology adapted to the Romanian context 2.1 General ESPON TIA Quick Check methodologies and tools (OIR) P 12. The ESPON TIA Quick Check methodology was developed as part of the ESPON ARTS project with the objective of assisting policymakers in evaluating the potential territorial impacts of legislations, policies, and directives prior to their implementation4 5. The methodology combines quantitative data on regional sensitivity with expert judgment gathered through workshops to assess the type and strength of policy impacts. Expert judgement is used to determine the “exposure� a given policy is creating across all regions, while quantitative data is used to determine the “regional sensitivity� or “territorial sensitivity� of the individual regions. The combination of those two factors allows to calculate the potential territorial impact for each individual region (see illustration below). The approach is based on the vulnerability concept developed by the Intergovernmental Panel on Climate Change (IPCC). Figure 1. Exposure x territorial sensitivity = territorial impact Source: OIR, 2015. • “Territorial Sensitivity� describes the baseline situation of the region according to its ability to cope with external effects. It is a characteristic of a region that can be described by different indicators regardless of the topic analyzed. • “Exposure� describes the intensity of the potential effect of the three infrastructure measures on a specific indicator. Exposure illustrates the experts’ judgement, i.e. the main findings of the expert discussion at the TIA workshop. 4 Over time the application cases of the TIA Quick Check have been expanded and have covered not only policies but also (funding) programs and individual measures 5ESPON. (2021). ESPON TIA Tool 2020-2022. Draft Final Report. Retrieved from https://www.espon.eu/sites/default/files/attachments/TIA-Tool_Draft-Final-Report_20.pdf 12 | P a g e P 13. The assessment is embedded in a one-day workshop with subsequent reporting and enables policymakers to make a preliminary ex-ante assessment of a policy’s territorial effects in a short amount of time6. The workshop process includes several distinct steps: • interactive discussions on territorial impacts creating a systemic picture of potential impacts, • selecting corresponding indicators (“exposure fields�) and determining the influence on them via voting, • computing the results stemming from expert input and quantitative data, • production of maps on territorial impact patterns • discussion of patterns and deduction of policy recommendations P 14. To enhance its practicality and user-friendliness, the Quick Check methodology has been integrated into a web tool that computes territorial impact values and presents the results in impact maps, providing a foundation for expert discussion. The web-tool has been built for the European level and contains data down to NUTS 3 level. P 15. A comprehensive moderators guide for the setup and implementation of a TIA workshop and corresponding interpretations and reporting has been developed on the course of these projects. The moderators guide has been made available at the ESPON website7. P 16. While originally developed for European level assessments (and previously only working on NUTS2 level), pilot applications for sub-European level (e.g. Central Europe area, or national level) have been conducted over time. Nevertheless, the main obstacle for national level assessments has been the limited data availability and limited spatial resolution of the webtool. 2.2 Adaptation of the TIA Quick Check methodology for Romania P 17. The application of the TIA Quick Check methodology for Romania in the requested use case has required the project team to adapt the methodology and to increase the spatial resolution of the indicators and maps used to facilitate the discussions. P 18. General adaptations to the methodology For the crucial step of computing expert input with underlying quantitative data, a regional database on LAU level was needed. Furthermore, a way of computing the inputs and creation of maps was required, which fits into the workshop schedule (i.e. the process after determination of indicators to printing out of final maps cannot take more than an hour). For this purpose, the project team developed an excel-based support package which contains the database of regional indicators, is able to calculate the regional impact values based on external input and finally allows for the exporting of maps in a useful format. The developed package is user-friendly and only basic knowledge of Microsoft Excel is required for using the functionalities. Nevertheless, in order to apply future updates of data, add indicators or make changes to the underlying shapefiles, a fundamental knowledge in handling of databases and Excel is recommended. Except from Microsoft Excel, no other programs are required, thus maps can be produced without the use of dedicated GIS software. The outputs of the excel file are however structured in a way that allow the import into dedicated GIS software for later use, e.g. in order to visually improve the mapping. The input and output data are arranged 6 However, the ESPON TIA Quick Check is intended to serve as a discussion basis for further analysis and should not be considered as an option in itself for a full-scale evaluation. This tool is intended to provide a simplified and user-friendly ex- ante assessment of the potential impact of various EU, national or regional interventions. The assessment can outline first insights and recommendations, but in particular will point out aspects for which subsequent in-depth assessments are needed. 7 https://www.espon.eu/sites/default/files/attachments/TIA-Tool_moderators-guide_20.pdf 13 | P a g e in various sheets. The following functions, which partially are present in the TIA webtool as well and which are required for a detailed TIA on the national level were included as standard functionalities: • Simple addition of new indicators by adding them in the predefined columns in the database, • Simple input template for votes, • Visualization of vote numbers, • Calculation of positive and negative impacts, • Switch between Z(10-90) and Z(0-100) normalization, • Automated calculation of impact classes and visualization of impact class visualizations, • Mapping of impact classes in standard map formats and uniform visual appearance. P 19. Type and number of indicators included in the tool A comprehensive data set provided by MDPWA and the supporting consultant was included into the Excel tool (sheet “DB�). It comprises 167 indicators covering a broad range of thematic fields such as demography, economy, employment, governance, natural resources or land use. The database contains indicators with both relative and absolute values, however relative values make up the majority. 2.3 Inputs for a manual for future users P 20. Inputs required for workshop facilitation The project team included a simple to use method to select indicators to be included in the calculations, and to input the votes received for each indicator. In the sheet “Selection_ExposureFields� the user can select any exposure field that is integrated in the database by using the dropdown menus in column B. Then the numbers of the expert voting have to be entered in the respective rows. Figure 2. Input sheet 14 | P a g e P 21. In the database, each exposure field has been predefined whether a high value is leading to higher sensitivity (“benefit�) or a high value is leading to lower sensitivity (“cost�) for the regions’ welfare. In the TIA Quick Check methodology, this is called “direction of impact� and determined by applying either a factor of 1 or -1 to the field. For each exposure field, the direction of impact can be changed in the database by the user at any time and the subsequent calculations will be updated automatically. Figure 3. Database P 22. Outputs of the calculations In the sheet “Map�, a map of Romania at LAU level shows the distribution o f the regional impact classes in accordance with the selection the user made. Three different selection fields are available to the user: • “Exposure field� which will show a list of the ones picked in the “Selection_ExposureFields� sheet. All exposure fields should be shown in the workshop • “Effect� ranging from strong advantageous to strong disadvantageous. The selection corresponding to the displayed majority vote in the bar-chart should be made • “Normalization mode� which allows to switch from the “0-100� mode (using the original indicator values without conversion) to the “10-90� mode (capping the values below the 0,1 percentile and above the 0,9 percentile, thus eliminating outliers from the calculations and allowing for a more even spread of impact classes) Once a change in one of the dropdown list has been made, the impact classes on the map will be updated promptly. Furthermore, the following charts will be automatically updated as well: the bar chart shows the result of expert voting and the pie chart displays the percentage distribution of the regional impact classes. In the bottom left corner, some metadata on the selected exposure field is displayed. This allows moderators to have a quick info in the definition and up-to-datedness of any selected indicator. 15 | P a g e Figure 4. Excel tool, sheet “Map� P 23. Background calculations in the Excelsheet8 Various sheets are performing the impact calculations in the background (Normalised_10-90/0-100 and DB_10- 90/0-100). The territorial impact combines intensity of the exposure which is estimated by the participants of the workshop and the pre-defined regional sensitivity for each region which is described by an indicator at a regional level. The experts’ judgement is a qualitative assessment (e.g. strong advantageous effect on territorial welfare) and the sensitivity a quantitative indicator estimating the identified effects. The intensity of exposure (e) is evaluated by the experts’ judgement. It is based on the identification of the fields of exposure which is described in the systemic picture. The judgements of the experts (strong advantageous, weak advantageous, minor effect/divers, weak disadvantageous or strong disadvantageous) are transformed into respective numerical exposure values (e ∈ {-1.5, -1, 0, 1, 1.5}). The regional sensitivity (s) is defined by an indicator. For all regions, the indicator is normalized in a range from 0.75 to 1.25. The tool offers two different options for the normalization of the data provided: • Z(0-100) normalization mode: here, all data is directly normalized in a range from 0.75 to 1.25. As no outliers will be excluded, the whole range of data will be visualized. The disadvantage of this normalization mode is that outliers could blur differences between values at the center of the distribution. As a consequence, maps are often very homogenous in color. • Z(10-90) normalization mode: the basis of this mode is the first bounding the values to the 10% and 90% quantile of the values. Then the values are normalized in a range from 0.75 to 1.25. In this normalization 8 cp. ESPON 2021 16 | P a g e mode, outliers are cut off, which allows to expose more subtle differences for the “normal� (non -outlier, center 80%) regions. Calculating the normalized regional value for each indicator by feature scaling 𝑋𝑟 − 𝑋𝑚𝑖𝑛 𝑋𝑟 ′ = 𝑋𝑚𝑎𝑥 − 𝑋𝑚𝑖𝑛 𝑋𝑟 ' normalised value of a region r for indicator X 𝑋𝑟 original value of a region r for indicator X 𝑋𝑚𝑎𝑥 maximum value of all regions for indicator X 𝑋𝑚𝑖𝑛 minimum value of all regions for indicator X Based on the normalization, the territorial impact (i) is derived by the product of the numerical value for the intensity of the exposure judged by the experts and the normalized values for regional sensitivity (i = e * s). Consequently, the finale values depicting the impact are continuous and in the range of -1.875 to +1.875. These impact scores are then mapped to four positive or negative classes (plus the 0 class, indicating no exposure): minor impact (|i| ∈ ]0;1]), moderate impact (|i| ∈ ]1;1.2]), high impact (|i| ∈ ]1.2;1.5]) and very high impact (|i| ∈ ]1.5;1.875]). P 24. Updating of the Excelsheet The excel sheet can be updated for future use cases in various ways. The indicators are stored in a raw-value database, thus if e.g. an indicator is to be updated with data for the latest year, the corresponding indicator values (and metadata) can simply be exchanged. For adding additional indicators, 33 columns are currently reserved which are not yet filled with data. In case additional datasets beyond the foreseen 200 are to be added, or in case amendments to the territorial structure of Romania are made, a methodological and practical outline of all functionalities of the Exelsheet is provided below. This will allow proficient Excel users to make the required changes individually. P 25. “Control� sheet The dropdown lists from sheet “Map� is connected to the respective table in the sheet “Control�. All other inputs done by the user are also collected in this section. Depending on the selection chosen in the “Map� sheet, all control elements will be updated accordingly. The following sections update the table from the sheet “MappingData�, which is the basis for mapping the values executed by a Visual Basic script: • Table “Normalization Mode� controls the type of normalization. Cell B9 shows the selected normalization mode (“1� for the Z(10-90) normalization and “2� for the Z(0-100) normalization) currently selected by the user. • The exposure fields both in the database and in the “Selection_ExposureFields� sheet have an ascending numbering. However, it is not necessary that an exposure field has the same number in both sections. In order that the tool is able to refer to the correct data of the selected exposure field, the section in row 13 and 14 shows the assigned number from the database and from the sheet “Selection_ExposureFields�. • The list “Current color scale� displays the color codes for each impact class. Depending on whether a positive or negative impact is selected, the color codes will be updated accordingly based on table “Color scale�. The following section control the bar and pie chart in the “Map� sheet: • Table “Effects� controls the type of effect. Each type of effect is assigned to a number. The current type selected by the user is displayed in cell B2. Furthermore, the number of the expert voting from the “Selection_ExposureFields� is shown in column “Count� for the respective exposure field. 17 | P a g e • The list “Number of regions affected� (starting from row 33) counts the number of regions of each im pact class based on the data in column “Selection� from sheet “MappingData�. Figure 5. Excel tool, sheet “Control� 18 | P a g e P 26. VBA script for visualisations Once a change in one of the dropdown lists from the “Map� sheet has been made, the Visual Basic script shown below will be executed. Each cell containing the mapping values (resp. impact classes) from the “Selection� column in sheet “MappingData� and each freeform (polygon) of each region on the map have an individual cell name. Based on the equivalent list in the “Control� sheet (first table starting from row 43), each region will be colored in accordance with the respective color class. Figure 6: VB script – map painting Finally, the colors of legend on the map will be changed depending on whether a positive or negative impact as been selected. This will be executed by the script shown in Figure 7. Figure 7: VB script – coloring 19 | P a g e 3 Pilot application of the TIA Quick Check: National Investment Program “Anghel Saligny� 3.1 Overview of the Program selected for TIA Quick Check General presentation of the “Anghel Saligny� Program P 27. The “Anghel Saligny� National Investment Program 2022-2028, hereinafter referred to as the “Program�, is a multi-annual initiative for local development, financed by the state budget and coordinated by the MDPWA. The main objective of the Program is to promote territorial cohesion by providing basic infrastructure to local administrative units, thus enhancing the living and working conditions of all Romanian residents 9. P 28. The Program has a total financial envelope of 65 billion RON and is designed to support investments in three key areas10: (i) water supply and sewage systems (22.5 billion RON, 35% of the total financial allocation), (ii) road and bridge modernization or construction (30 billion RON, 46% of the total financial allocation), and (iii) gas distribution infrastructure (12.5 billion RON, 19% of the total financial allocation). P 29. All NUTS 3 units have submitted financing applications as of November 2021, indicating the widespread interest in the Program11 (see map below). Between September and November 2021, the MDPWA received 7,545 proposals through the electronic platform, totaling 146 billion RON, once again demonstrating the high level of interest in all three key areas supported by the Program. Map 1. “Anghel Saligny� Program, distribution of financing applications by county, as of November 8, 2021 Source: MDPWA 9 As per Methodological Norms for “Anghel Saligny� Program, available at https://www.mdlpa.ro/pages/anghelsaligny 10 Data provided by MDPWA 11 Data provided by MDPWA 20 | P a g e Lessons learned from the previous National Program for Local Development P 30. The “Anghel Saligny� Program is the successor12 of the National Program for Local Development (PNDL). PNDL was launched in 201313 “to support local public authorities in prioritizing funding so that Romania, as a whole, can become an efficiently built space where all residents have equal access to resources and benefit from improved quality of life� and “to facilitate the development of communities based on their potential and sustainable development strategies, following the principles of competitiveness and territorial cohesion� 14. P 31. The PNDL was an important expression of the government’s commitment towards the development of local infrastructure. Article 7 in the GEO 28/2013 describes a broad list of intervention areas supported by PNDL: water supply systems and drinking water treatment plant, sewage systems (networks) and wastewater treatment plant, education units (kindergartens, primary and secondary schools, high schools, etc.), healthcare units in rural areas (clinics, pharmacies, etc.), public roads (i.e., county roads, local interest roads, commune roads and/or public roads within localities); bridges, culverts, and/or footbridges; local cultural facilities, such as libraries, museums, multi-functional cultural centers, and theaters, landfills, public, commercial markets, fairs, cattle fairs, as applicable, sports facilities, and headquarters of local public authorities and other subordinated public institutions. The types of eligible works include construction of new infrastructure, as well as extension, rehabilitation, and upgrading of existing infrastructure. In essence, the PNDL was able to cover the MDPWA’s entire vast portfolio of projects, both previously-financed interventions (at various stages of completion) and new investments, for all types of local public beneficiaries (from local councils in communes and cities to county councils). P 32. As of December 2022, the total value of both completed and ongoing contracted projects amounts to over 46.2 billion RON, encompassing a total of 11,640 individual projects15. The highest share of contracted amounts is linked to investments in roads, bridges and walkways (25.4 billion RON, 55%), followed by water supply and sewage (14.0 billion, 30%), education units (5.0 billion, 11%) and other types of investments (1.8 billion, 4%)16. P 33. On the downside, the results and impacts of the PNDL were not properly monitored and analyzed throughout implementation. Currently, there is no formal process for evaluating the impact of completed PNDL investments and there are no institutionalized efforts for exchanging good practices among past, current, and future beneficiaries of PNDL funds. The most recent report of the Court of Auditors (for the year 2021) concluded that “In the absence of performance indicators, it is impossible to determine the degree of achievement of the program’s objectives. The government programs implemented by MDPWA do not have a post-monitoring component, in order to provide an image of the socio-economic impact and ensure the high-efficiency use of funds from the state budget�17. P 34. Consequently, there is not enough evidence to determine the PNDL benefits and support its continuous improvement. Previous reports by the World Bank in 2015 identified several issues related to the program ’s design and implementation, including monitoring, but only some of these issues were partially corrected. These issues included an unclear methodology for budget allocation by county, an unclear project selection model, overlap with other programs, weak project implementation monitoring, and a lack of post-implementation evaluation. 12According to the initial planning, PNDL was supposed to be completed in 2020. However, considering the high number of delayed projects, it was extended until 2024. 13 The Government Emergency Ordinance (GEO) 28/2013 legally established the PNDL 14 Based on information available at: https://www.mdlpa.ro/pages/programulnationaldezvoltarelocala 15 Considering both phases of the PNDL, respectively PNDL I 2015-2024 and PNDL II 2017-2024. 16 Based on information available at: https://www.mdlpa.ro/pages/programulnationaldezvoltarelocala 17Court of Auditors, Public Annual Report for 2021, available at https://www.curteadeconturi.ro/publicatii/rapoarte- publice-anuale 21 | P a g e Selected measures for TIA Quick Check P 35. To improve the design of the “Anghel Saligny� Program before its launch, the MDPWA decided to use the ex- ante TIA Quick Check methodology. This approach assessed all three measures supported by the program, which included investments in (i) water supply and sewage systems, (ii) road and bridge modernization or construction, and (iii) gas distribution infrastructure, as a comprehensive package. The objective was to identify the expected economic, environmental, societal, and governmental effects of the program, as well as any potential territorial sensitivity. The methodology and results of this assessment are presented in the following sections. 3.2 Methodological approach P 36. The approach selected for the TIA demonstration mirrors the approach generally applied with the TIA Quick Check methodology: • In the preparatory phase, two moderators are preparing the workshop. An agreement of the scope of the TIA regarding the assessed policy and the measures included is reached with the hosting institution. Indicators which are relevant for the assessment are identified. • As this was the first implementation of the national TIA Quick Check for Romania, the full database of indicators had to be researched (usually this research would only cover additional indicators relevant for a particular assignment). In the current project, an additional Romanian consultant together with MDPWA collected and prepared the agreed upon indicators based on data from the Territorial Observatory. • The composition of the expert group, invitation management and additional organizational measures are taken by the hosting organization. In the current project, MDPWA covered these steps and provided the room for the on-site workshop as well. P 37. For the on-site workshop, a range of participants from public administration, research and academia were present. The workshop with the participants placed them in a hypothetical setting in the preparation phase of the Anghel Saligny program, where they would assess the potential territorial impacts as a basis for deciding on funding focus. The steps and results are outlined in the subsequent section. 3.3 Potential territorial impacts 3.3.1 Identifying the potential territorial effects in terms of economic, societal, environmental and governance-related aspects – drafting a conceptual model P 38. In the first step of the TIA workshop, the participating experts discussed the potential effects of the three assessed infrastructure measures, using a territorial or place-based approach. This discussion revealed potential territorial impacts in all discussed thematic fields, thus economic, societal, environmental and governance-related impacts aspects. The participants identified potential linkages between implementation of the selected measures and the effect on territories, including interdependencies and feedback loops between different effects (see figure below). Furthermore, several aspects were discussed both from a positive as well as from a negative perspective. 22 | P a g e Figure 8. Workshop findings: Systemic picture Source: Territorial impact assessment expert workshop. 14 March 2023 3.3.2 Picturing the potential territorial effects through indicators P 39. In order to assess the potential effects pictured in the conceptual model, suitable indicators needed to be selected for the impacts that the experts discussed in the fields of the economy, the environment, society and governance. The availability of data for all LAU regions posed certain limitations on the indicators that can be used, however the comprehensive data collection in the Territorial Observatory in Romania allowed for the identification of suitable indicators for most of the fields discussed. From the available indicators experts chose the following indicators to describe the identified effects. Picturing potential territorial impacts in terms of economic indicators • Economic performance – GDP/Capita • Employers – Real estate transactions Picturing potential territorial impacts in terms of environmental indicators • Natural land use Picturing potential territorial impacts on the basis of societal indicators • Young demography • School population Picturing potential territorial impacts in terms of governance indicators • Local authority budgets • New dwellings completed/10,000 inhabitants • Water supply network – households 23 | P a g e • Sewage network P 40. Furthermore, the experts agreed that the following indicators, which are not included in the ESPON TIA Quick Check tool, would also be relevant to describe the identified effects: • Household income • Share of daily workers • Air quality (CO2, NOx, PM10/2.5), water quality (Nitrate, Water Framework Directive) • Housing prices 3.3.3 Judging the intensity of the potential effects P 41. The workshop participants were asked to estimate the potential effects of the three selected measures. They judged the potential effect on the territorial welfare along the following scores: • ++ strong advantageous effect on territorial welfare (strong increase) • + weak advantageous effect on territorial welfare (increase) • o no effect/unknown effect/effect cannot be specified • - weak disadvantageous effect on territorial welfare (decrease) • -- strong disadvantageous effect on territorial welfare (strong decrease) 3.3.4 Calculating the potential “regional impact� – Combining the expert judgement with regional sensitivity Based on the expert judgement and the underlying t erritorial sensitivity, the “territorial impact� value for each region is calculated. The detailed methodology is outlined in sections 2.1 and 2.2. 3.3.5 Mapping the potential territorial impact P 42. The result of the territorial impact assessment is presented in maps. The maps displayed below show potential territorial impacts based on a combination of the expert judgement on exposure with the territorial sensitivity of a region, described by an indicator on LAU level. Whereas the expert judgement is a qualitative judgement (i.e. a strong advantageous effect on territorial welfare/moderate advantageous effect/no effect/moderate disadvantageous effect/strong disadvantageous effect), the sensitivity is a quantitative indicator. 3.3.6 Economic performance P 43. The ability to properly heat and supply all homes with water can reduce household expenses and increase disposable income with positive spillover effects on the economy. Furthermore, infrastructure can in general improve the location factors of any given region and increase the capability of retaining existing industries or attracting new industries. These effects in combination can have positive impacts on the regional economy. Consequently, six experts voted for weak positive and eight voted for strong positive effects. 24 | P a g e Figure 9. Result of the expert judgement: economic performance affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 44. The indicator “Economic performance� shows the sum of final uses of goods and services of resident institutional units (actual final consumption) plus exports minus imports of goods and services in million RON per capita (reference year: 2019). Regions showing a lower GDP per capita are expected to be more sensitive. Sensitivity is thus indirectly proportional to the GDP per capita. Map 2. Economic performance (GDP/capita) affected by the Anghel Saligny measures – expert judgement: weak positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 P 45. The map above shows the potential territorial impact of the measures linked to the Anghel Saligny measures on the economic performance. It second map combines the expert judgement of a weak positive effect with the 25 | P a g e given sensitivity of a region. Regions that would be highly affected can be found in the structurally weaker Northeastern Counties (e.g. Botoșani, Bacău, Suceava) as well in the counties in the South (Mehedinți, Teleorman and Giurgiu). These regions are expected to get a high positive impact and represent 23% of all the regions. Almost half of the regions (47%) would have a moderate positive impact and 30% a minor positive impact. 3.3.7 Employers – Real estate transactions P 46. As all measures assessed in the TIA are improving location factors, consequently the experts identified an improvement in living conditions across different dimensions. Increased accessibility can improve the value of real estate in particular, both for commercial as well as residential buildings. Improvement in water and sewage systems as well as heating likewise have a positive effect on property values, albeit being relevant as a precondition for selling property in the first place rather than simply improving the quality. The combined effects are likely to lead to an increase in real estate transactions and consequently on the employment in the sector. Based on these considerations, eight experts identified a potential positive effect, with six further experts seeing a strong positive effect. The experts underlined however, that gentrification can be a side effect of these developments, which exhibits numerous indirect negative social effects. Figure 10. Result of the expert judgement: employers in the real estate transactions sector affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 47. The indicator depicts the share of the civilian employed population in the real estate sector (reference year: 2020), according to the balance of labour force methodology: all persons in an income-generating occupation, which is normally engaged in one of the activities of the national economy, being employed in an economic or social activity under a contract of employment or self-employment for the purpose of earning income in the form of wages, payment in kind, etc. Regions showing a higher share of people employed in the real estate sector are expected to be more sensitive. Sensitivity is thus directly proportional to the share of employment in the real estate sector. P 48. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the employment in the real estate sector. It combines the expert judgement of a weak positive effect with the given sensitivity of a region. 21% of the regions are expected to get a very high positive impact. These regions are distributed rather evenly throughout Romania. Most of them can be found in agglomeration areas 26 | P a g e of larger cities, in particular Timisoara, Constance, Sibiu and along the Bucharest-Brasov axis. 11% of the regions could get a high positive impact and the majority a moderate positive impact. Map 3. Employers in the real estate transactions sector affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 3.4 Expected environmental effects 3.4.1 Natural land use P 49. Environmental impacts of the proposed measures were foreseen from different perspectives, especially linked to landscape- and ecosystem fragmentation as well as in relation to urban sprawl. The participants identified a tendency of road- and rail infrastructure in particular to exhibit strong negative effects on ecosystems. These result on the one hand from the construction itself, but also as a secondary effect linked to increased overall traffic which can manifest in considerable distance from actual investment- and construction projects. On the other hand, investments in sewage systems can reduce the release of untreated sewage in sensible areas which was seen as positive effect. However overall, the experts opted for a predominantly negative outlook on the environmental effects with eight experts expecting a negative (one strong negative) impact, and five experts expecting a positive (three strong positive) impact. One expert did not judge for any impacts. P 50. The indicator “Natural land use� is defined as any area occupied with forests, shrub and herbaceous vegetation associations, as well as spaces with little or no vegetation under natural conditions, as per the EU EEA CLC classes definitions (reference year: 2018). The indicator is expressed relative to the total area size. Regions showing a higher share of natural land area are expected to be more sensitive. Sensitivity is thus directly proportional to the share land areas in this category. 27 | P a g e Figure 11. Result of the expert judgement: natural land use affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 51. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering natural land areas. It combines the expert judgement of a weak negative effect with the given sensitivity of a region. Unsurprisingly, the regions which would see the highest negative impact are concentrated in the areas of the Carpathian Mountains which have the highest share of unfragmented natural landscapes. 14% of the regions are expected to have a high negative impact and 21% a moderate negative impact. Most of the regions would only see a minor negative impact. Map 4. Natural land use affected by the Anghel Saligny measures – expert judgement: weak negative effect Source: Territorial impact assessment expert workshop, 14 March 2023 28 | P a g e 3.5 Expected societal effects 3.5.1 Young demography P 52. Linked to the effects on gentrification as well as improvement of the general quality of life the experts determined that the overall attractivity of regions for young people would be improved. While it was not seen as likely that the investments would be able to actively attract young people from different regions, the potential of regions to retain young people already living in- or adjacent to regions with investment from the program would be increased. Furthermore, improved quality of life and potential for higher income due to economic growth induced by the program can reduce out-of-country migration for young skilled workers. Consequently, the experts univocally opted for positive effects, with six positive and eight strong positive votes. Figure 12. Result of the expert judgement: young demography affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 53. The indicator shows the share of the population group aged between 0 to 14 years with Romanian citizenship and residence on Romanian territory on the total number of population (reference year: 2021). Regions showing a higher share of the young demography are expected to be more sensitive. Sensitivity is thus directly proportional to the share of this age group. P 54. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the young demography. It combines the expert judgement of a strong positive effect with the given sensitivity of a region. 42% of the regions could get a very high positive impact (with highest densities of these regions in Transylvania and Moldova as well as the black sea coast) and 41% still a high positive impact. The minority (17%) of the regions would be least affected and are expected to have only moderate positive impact. 29 | P a g e Map 5. Young demography affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 3.5.2 School population P 55. Similar to the exposure field on young demography, school population was deemed a suitable proxy to depict potential impacts related to young people growing up in the regions. In particular due to the time lag between implementation of the program and manifestation of actual effects, the school population which would take up to 10 years from the current year to be able to independently change locations was identified as relevant indicator. Experts assessed it as less relevant than the young demography though, with four experts voting for no impact, four voting for a weak positive and six voting for a strong positive impact. Figure 13. Result of the expert judgement: school population affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 30 | P a g e P 56. The indicator shows the share of school population on total number of population (reference year: 2020). It includes children in kindergartens and nurseries, pupils and students included in the education and training process in a given year, regardless of the form of education they attend (day, evening, part-time, distance education) and age. Regions showing a higher share of school population are expected to be more sensitive. Sensitivity is thus directly proportional to the share of this population group. P 57. The following maps shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the school population. The first map combines the expert judgement of a strong positive effect with the given sensitivity of a region. 35% of the regions could get a very high positive impact and 47% of the regions would have a high positive impact. These regions are rather scattered over the country. 18% of the regions would get a moderate positive impact. Map 6. School population affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 3.6 Expected governance effects 3.6.1 Local authority budgets P 58. The effects on available budgets for local authorities were discussed with some controversy, as experts raised both positive and negative potential impacts. Overall, improvement of infrastructure was assessed as fostering local economic potentials and improving the location factors of any given municipality. Therefore, some positive spin-off effects in terms of raised tax revenue were expected. On the other hand, experts raised the challenge for local authorities in providing financial support to the upkeep of constructed infrastructure. Nevertheless, the majority opinion saw positive effects, with nine experts voting for strong positive and two for positive effects. Contrasting this assessment, two experts voted for negative and one for a strong negative effect. 31 | P a g e Figure 14. Result of the expert judgement: local authority budgets affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 59. The indicator represents the amount of total revenue of the budgets of the TAUs as the total own revenue (reference year: 2011). It is expressed in RON per capita. Regions showing a lower local authority budget are expected to be more sensitive. Sensitivity is thus indirectly proportional to the share of local authority budgets. P 60. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the local authority budgets. It combines the expert judgement of a strong positive effect with the given sensitivity of a region. The majority of the regions (71%) could get a very high positive impact and 18% still a high positive impact. 11% of the regions would see a moderate positive impact. No clear patterns on a territorial level can be observed from those distributions however. Map 7. Local authority budgets affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 32 | P a g e 3.6.2 New dwellings completed P 61. As the investments foreseen under the program are directly linked to improvement of built infrastructure (including residential buildings) as well as improvements of location factors, the experts assessed a positive impact on the construction of new buildings. The impact is likely to be more significant where not a high number of buildings is currently completed, as those regions are also more likely to have a higher share of buildings without access to the basic infrastructure targeted by the program. Consequently, the experts unanimously voted for positive effects, with six weak and eight strong positive votes. Figure 15. Result of the expert judgement: new dwellings completed affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 62. The indicator shows the number of dwellings completed during a year of reference that did not previously exist (reference year: 2011). It is stated in total number of dwellings per 10,000 inhabitants. Regions showing a lower number of new dwellings completed are expected to be more sensitive. Sensitivity is thus inversely proportional to the number of dwellings completed. P 63. The following maps show the potential territorial impact of the measures linked to the Anghel Saligny measures considering new dwellings completed. The first map combines the expert judgement of a strong positive effect with the given sensitivity of a region. Most parts of the country represented by 74% of the regions could get a very high positive impact. 14% of the regions would still see a high positive impact and 12% a moderate positive impact, with some concentration in the suburban area of Bucharest and Constance. 33 | P a g e Map 8. New dwellings completed affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 3.6.3 Water supply network – households P 64. As one of the main measures assessed concerns access to water supply for households, the experts assessed a clear positive impact on those regions where currently a significant need for such investments is present. No negative effects on the exposure field were foreseen, however some spill-over effects (already discussed above) linked to rising costs for households could be possible. Overall the experts unanimously voted for a strong positive effect. Figure 16. Result of the expert judgement: water supply network (households) affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 34 | P a g e P 65. The indicator depicts the share of households connected to the water supply network (reference year: 2011). Regions showing a lower share of these households are expected to be more sensitive. Sensitivity is thus indirectly proportional to the share of households connected to water supply network. P 66. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the water supply network. It combines the expert judgement of a strong positive effect with the given sensitivity of a region. A significantly high share of regions getting the highest positive impact can be found in the structurally weaker Northeastern and South/Southeastern part (Oltenia and parts of Muntenia) of the country. Apart from that, other regions that would also get a very high positive impact are rather scattered throughout Romania. The regions that would be highly affected represent 43% of the regions. Other regions would either have a high positive impact (38%) or moderate positive impact (19%). Map 9. Water supply network (households) affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 3.6.4 Sewage network P 67. Similarly to water supply, the access to the sewage network is at the core of the assessed measures supported by the program. The experts consequently followed the same line of argumentation and voted unanimously for a strong positive impact. Potential negative spill-over effects especially for poor households were discussed, but it was agreed that these will require targeted responses and cannot be at the core of an infrastructure program. All experts voted for a strong positive effect. P 68. The indicator shows the length of sewerage network expressed in kilometers (reference year: 2011). It includes the channels (pipes) through which the sewage is collected as well as wastewater (domestic, industrial, etc.) and rainwater, from the territory of the locality with public sewerage, starting from the connection points of buildings with sewerage systems to the point of discharge of wastewater into a natural outfall. Regions with a lower length of sewerage pipes are expected to be more sensitive. Sensitivity is thus indirectly proportional to the length of sewerage network. 35 | P a g e Figure 17. Result of the expert judgement: sewage network affected by the Anghel Saligny measures Source: Territorial impact assessment expert workshop, 14 March 2023 P 69. The following map shows the potential territorial impact of the measures linked to the Anghel Saligny measures considering the sewage network. It combines the expert judgement of a strong positive effect with the given sensitivity of a region. The vast majority of the regions (78%) would see a very high positive impact. 11% of the regions are expected to still get a very high positive impact. Another 11% could get a moderate positive impact. No clear territorial patterns emerge from the map, as the fact that urban regions are seeing a lower impact is linked to the particular geographies and delineation of municipalities and is inherent to the indicator. Map 10. Sewage network affected by the Anghel Saligny measures – expert judgement: strong positive effect Source: Territorial impact assessment expert workshop, 14 March 2023 36 | P a g e 3.7 Conclusions and policy recommendations P 70. In the debate and qualitative analysis, a number of points were raised by the experts based on the above analyses. The following section corresponds to the synthesis of the points raised and policy recommendations deduced from the discussion. 3.7.1 Priorities and objectives P 71. As a number of effects related to issues which were not at the core of the program, there is a need for clarification of the scope of the support and the treatment of spill-over effects. Improvement of infrastructure can have particular side-effects for social issues, but also affect local administration to a considerable extent. In some cases, these effects warrant either counter-actions on the program level, or they require additional funding made available. Therefore, it is recommended for the program • To outline the objectives and non-objectives of the measures both in terms of core funding objectives as well as objectives linked to spill-over effects. Identification of these objectives is required for shaping the support measures accordingly. • To develop a strategy for dealing with societal effects in relation to an infrastructure program, providing a coherent approach. If societal issues should be addressed in the program, they have to be reflected e.g. in funding focus and goals, regional spending as well as in the selection process and requirements for funded projects. If these issues should not be addressed and the program remain focused on infrastructure only, an outline of the corresponding societal effects should be included, nonetheless. • In any case it would be relevant to clearly identify different initiatives which might be able to address the spill-over effects of the planned measures. Coordination with these initiatives is required in order to provide targeted support for the mitigation of negative effects. In case the program shall not address societal effects as well, the importance of identifying these initiatives is even increased. • For measuring the fulfilment of the objectives as well as for measuring the spill-over effects and the effectiveness of policy responses to mitigate or enhance them, an integrated monitoring system is required. This system shall be able to depict not only short-term outputs, but created change and mitigated negative impacts over the lifetime of the infrastructure investments. P 72. The inherent regional differences, in particular between urban and rural regions have to be addressed in the measures design with a greater emphasis. While in urban regions a larger number of residents per unit of money spent can be potentially supported, the needs of urban areas differ significantly from those of rural areas. Explicitly addressing these different needs when deciding on the funding focus is relevant: • Measures linked to access to sewage and water infrastructure can potentially influence rural regions to a larger degree than urban areas. In relation to the outlined goals of equal access to basic infrastructure, it would be recommended to set a funding focus on those areas. • An explicit limit of funding for rural areas could be set to better target the support measures in this regard. These limits could complement the programs with a funding focus on urban areas. P 73. Local authorities are currently following their own objectives which sometimes are not in line with national level objectives. Linking funding with local level planning can increase the coherence of local- and national level strategies and can support work towards common goals across the programs and measures. This requires targeted action and especially coordination by authorities on the different levels: • Local authorities need to verify their local-level strategies regarding the goals set out in national level programs. Infrastructure funded by national level actions should contribute to goals set in local level strategies and vice-versa. 37 | P a g e • The link between local level strategies and national level support should be evaluated and adjusted accordingly. Adjustment processes could include participatory involvement of local level authorities in national policies, but also broad assessment of local level strategies in the drafting of higher-level programs and strategies in order to arrive at coherent results. 3.7.2 Funding focus P 74. The assessment did not reveal any cross-topic, larger scale regional patterns in general for the program. The urban-rural divide is visible in particular in relation to the infrastructure measures for water- and sewage systems. Furthermore, the assessment has unveiled some catching up effects for the structurally weaker regions (in particular in the Nord-Est as well as in the Oltenia regions) in various fields, even under the assumption of no particular regional focus of funding support. It is therefore recommended: • To develop a coherent approach across funding schemes, national and EU-level, to identify the available resources and potential gaps. For the 2014-2020 funding period, a nationwide assessment of funding available has been conducted identifying also the different topics and fields addressed. A similar assessment for the current funding period 2021-2027 and the national level programs being implemented at the same time is required for deciding on potential funding focus of the program. • A more in-depth assessment of potential effects of different funding scenarios on the structurally weaker regions is required to identify the need for a regional focus in the Anghel Saligny program. Based on the outcomes of this assessment, it could be necessary to set an explicit regional focus on structurally weaker regions (e.g. through increased funding rates per capita) in the current program. • Develop a monitoring approach across programs which allows to identify impacts not only linked to individual measures. A cross-program assessment will unveil the relevance of regional focus of funding both in urban/rural as well as in weaker/stronger divides. 3.7.3 Goals conflicts P 75. Coherence of goals across programs and in the program hierarchy has already been addressed above. Apart from those potential goal conflicts across programs, there were also conflicts identified linked only to the program at hand. These conflicts can contribute to a less than ideal implementation or in some cases even completely mitigate the positive effects. It is therefore recommended to: • Assess the additional burden put on local authorities due to the implementation of the funding. Additional burden can be created both for administrative reasons as well as for authorities (e.g. municipalities) as operators of local infrastructure which is publicly owned. For the additional burden created, the potential need for further support in terms of capacity building, additional funding or higher-level direct support for the local authorities has to be assessed. Based on the outcome, support schemes or additional funding to be made available have to be outlined in the program. • As experience has shown, overwhelming municipalities with tasks will lead to “upwards� delegation, it is recommended to consider not only municipalities but also higher-level authorities in these assessments. Even if formal split of competencies will limit the possibilities, it could be preferable implement capacity building exercises at a higher level or concentrate responsibilities across several municipalities within higher level authorities. 3.7.4 Long-term safety of investments P 76. Linked to the capacities of local authorities, several considerations have to be made to ensure the long-term safety of the investments. If the required support cannot be provided to those authorities, there is a considerable risk for ineffective implementation (reducing the budget available for actual infrastructure investments), or future issues with the upkeep of the infrastructure. This would trigger either need for additional 38 | P a g e investment form the national level, or worse lead to the ineffectiveness of the infrastructure overall. It is thus recommended to: • Provide targeted training and capacity building to local authorities on the implementation of such programs, implementation of large-volume calls and corresponding administrative procedures etc. This requires earmarked budget from the program, or any other supplementary from of support provided from the national level. • Ensure the proper transfer of responsibilities to the local level for the long-term operation and upkeep of the infrastructure created. It is furthermore recommended to earmark “emergency� funding in case some municipalities which are particularly struggling in the future are incapable of ensuring the operation of infrastructure. • In particular linked to the construction of gas-related infrastructure, a national-level consideration of sources of gas and the technical implications linked to the different sources is necessary to ensure long- term viability of the investments. Linked to the ongoing gas crisis, it has become more and more likely that conventional sources and suppliers will be reduced and/or change, however infrastructure planning is still stuck with pre-crisis projections. A realistic future assessment of sources and suppliers as well as different scenarios will have to be conducted and taken into consideration by the program design. • For the overall program, it is necessary to monitor not only the short-term outputs, but the long-term created change respectively improvements for the regional situation based on an adequate monitoring system. 3.8 Lesson learned from the TIA exercise P 77. The development of the modified TIA Quick Check methodological approach for the Romanian national level has shown interesting potential for the broad application of Territorial Impact Assessments in policymaking. Several factors allow for the production of high-quality assessments in these circumstances: • Availability of detailed and differentiated municipal data through a high-quality territorial observatory. The data shows high resolution on the regional level, and is regularly updated by MDPWA. The availability of such data on the municipal level is a precondition for TIA assessments. However, even for indicators which are only available at NUTS3 level, the high number of regions in Romania still allows for useful assessments with the Quick Check methodology. • Upcoming 2021 census data which will update a considerable number of highly detailed indicators in the territorial observatory, which are currently only available for 2011 (last census year). For several thematic fields, the data from the census is unparalleled and cannot be meaningfully substituted by other regional level data. The new census data will now provide highly accurate and recent information, thus improving the potentials for TIA in the coming years significantly. • Even though very strong geographical divides exist in the form of the Carpathian mountains, the territorial patterns of indicators do not simply reproduce the underlying geography but show relevant and interesting differentiations for Territorial Impact Assessments. It could be observed in some other applications (e.g. linked to a geography of island regions), that the geography acts as the main determinant of indicator values across topics. As this is not the case for the Romanian circumstances, the potential for national level TIA is high. • A high-quality excel database, calculation and mapping file was produced which can easily be updated and modified for future applications. 39 | P a g e P 78. However, some challenges could also be identified in the pilot action applied in this project: • Municipal level assessments require high data quality, which in case of unavailability of specific indicators sometimes cannot be overcome by proxy indicators or regional breakdowns. While the program at hand did not provide a considerable challenge, for other topics this could lead to issues. In a classical TIA Quick Check application, preparation of data is making up less than 1/3 of the preparation time for the overall assessment. In some cases which require a larger effort for data preparation, including e.g. modelling of local level data, considerably more resources would have to be devoted to this. • Formerly TIA have been conducted mainly on NUST2 or NUTS3 level, which lead to some “evening out� effects across topics, as e.g. apart from capital regions, usually any NUTS2/3 region includes different geographies and urban as well as rural elements. Working on the municipal level in this case, some indicators show a strong tendency towards urban-rural divides simply based on the population density of the administrative region. These tendencies can skew effects for some indicators and have to be carefully considered both in the construction of indicators as well as in the assessments. • Without the TIA webtool and its readily available mapping- and exporting functionalities, the process of producing maps in the workshop setting is slowed down to some extent. This needs to be accounted for in the planning of a workshop session. P 79. Overall, the potential of TIA for national level circumstances working on municipal level could be confirmed with the project. Indicator development and data collection as well as interpretability of the maps lead to good quality results and is promising for future applications. Actual uptake of the instrument and methodology however depends on the national- and regional level authorities. 40 | P a g e 4 Conclusions. Next steps for integrating the TIA Quick Check into policymaking 4.1 Integrating the TIA Quick Check methodology into Policy formulation Why use TIA Quick Check? P 80. The TIA Quick Check methodology acknowledges that the unique characteristics of Romania ’s territories can influence their susceptibility to policies and initiatives, known as territorial sensitivity. For instance, small- scale infrastructure investments can have positive social impacts, but their magnitude may differ across regions based on factors such as population density and demographic characteristics, as demonstrated in the pilot TIA conducted for the “Anghel Saligny� program (see details under Chapter 3). By recognizing territorial sensitivity, policymakers can design policies customized to the distinct conditions of each territory, thus improving their efficiency and potential to have a positive impact. When to use TIA Quick Check? P 81. The TIA Quick Check methodology outlined in this report is suitable for use only ex-ante, when policymakers are creating or revising (national) interventions, such as policies, regulations, programs, and projects. The methodology combines quantitative data on regional sensitivity with expert opinion gathered through workshops to evaluate the nature and magnitude of policy impacts (see details under Chapter 2). During the policy formulation phase, policymakers can utilize the TIA Quick Check methodology to identify potential territorial impacts and make informed decisions on the appropriate course of action for the proposed policy. The nature of the methodology allows for a quick yet comprehensive overview of main impacts and can be implemented in short period of time. Figure 18. When to utilize the TIA Quick Check methodology in the Policy cycle Source: Authors’ elaboration based on OECD and ESPON methodologies for Policy design and evaluation 41 | P a g e Who can use TIA Quick Check? P 82. The TIA Quick Check methodology can be integrated into policymaking at the central and regional levels, but not suited for local levels. It can be used by the Ministry of Development, Public Works and Administration, as well as other line ministries, Regional Development Agencies, and Inter-community Development Agencies to estimate territorial impacts of national or territorial strategies and interventions. However, local authorities could also be encouraged to use other simple ex-ante TIA methodologies, such as workshops with relevant stakeholders and subject matter experts, for scenario planning. 4.2 Institutional roles and responsibilities Central government P 83. The TIA Quick Check methodology can be formally endorsed by the central government by integrating its use into methodological documents for policy design and regulatory assessments. The Better Regulation Toolbox18, which has been developed at the EU level, can serve as a valuable source of reference for incorporating the TIA Quick Check methodology into policy-making processes. By embedding the TIA Quick Check methodology into relevant methodological documents, policymakers can ensure that the assessment of territorial impacts becomes an integral part of policy formulation. This formal endorsement can facilitate consistent and widespread use of the TIA Quick Check methodology across different policy areas and levels of government, providing a standardized approach to considering territorial impacts in policy-making decisions. Such integration can help promote evidence-based and informed decision-making, leading to more effective and targeted policies that take into account the unique characteristics and sensitivities of different territories. Ministry of Development, Public Works and Administration P 84. The Ministry of Development, Public Works and Administration (MDPWA) serves as the custodian of the TIA Quick Check methodology and the accompanying calculation and mapping package. A dedicated unit within MDPWA has been trained to coordinate and facilitate future TIA Quick Checks in Romania. This unit should also be responsible for regularly updating the TIA Quick Check database with the latest indicators and data from various sources, ensuring that the methodology remains relevant and up to date. Additionally, the MDPWA can collaborate with other relevant government bodies and agencies to gather input, feedback, and data to continuously improve and refine the TIA Quick Check methodology for enhanced effectiveness in assessing territorial impacts. (Other) Policymakers at central and regional levels P 85. Each policymaker should carefully assess the opportunity and necessity of integrating the TIA Quick Check methodology into their policy formulation process. A formal request can be submitted to the MDPWA, which serves as the “owner� of the TIA Quick Check methodology and accompanying calculation and mapping package (see above). However, it is important to note that the TIA Quick Check does not provide definitive answers on its own, but rather serves as a foundation for further analyses. Expert discussions and interpretations of the results are necessary to fully understand the potential implications. Policymakers should carefully consider the information generated by the TIA Quick Check in conjunction with other relevant data, stakeholder input, and contextual factors to ensure a robust and informed policy formulation process. 18See Tool #34 Territorial Impacts, available at https://commission.europa.eu/law/law-making-process/planning-and- proposing-law/better-regulation/better-regulation-guidelines-and-toolbox/better-regulation-toolbox_en 42 | P a g e 4.3 Next steps P 86. Raising awareness regarding the use of TIA in general, and the national TIA Quick Check tool in particular: It is crucial to raise awareness among policymakers, government agencies, and relevant stakeholders about the benefits and potential applications of the TIA methodology in policy formulation. This can be done through workshops, seminars, and training sessions to promote understanding and adoption of the TIA Quick Check as a valuable decision-making tool. P 87. Disseminating the results of the pilot TIA at national and European level: The findings and outcomes of the pilot TIA conducted using the TIA Quick Check methodology should be disseminated widely at the national and European levels. This can be done through reports, publications, and presentations in relevant conferences and forums, to share the lessons learned, best practices, and policy implications with a broader audience. P 88. Increasing the capacity of the MDPWA to facilitate/moderate future TIA: The Ministry of Development, Public Works, and Administration (MDPWA) should continuously enhance its capacity to effectively facilitate and moderate future TIA exercises. This includes providing adequate training, resources, and support to the dedicated unit responsible for coordinating the TIA Quick Check process, as well as ensuring regular updates of the TIA Quick Check database with the latest indicators and data. P 89. Identifying other strategies and investment programs (in the design phase) that may benefit from the new TIA tool: Policymakers should proactively identify other strategies, policies, regulations, programs, and projects that are in the design phase and may benefit from the use of the TIA Quick Check methodology. This can help ensure that territorial impacts are systematically considered and integrated into the decision-making process across various policy areas and sectors. P 90. Preparing for future adaptation of the TIA, including complementarity with full-scale tools: As the TIA Quick Check methodology evolves and gains further acceptance, policymakers should plan for its future adaptation and potential complementarity with full-scale tools. This may involve exploring opportunities to align the TIA Quick Check with other established evaluation frameworks, methodologies, or policy assessment tools to further enhance its effectiveness and usefulness in policy formulation and decision-making processes. Proper preparation and strategic planning can ensure that the TIA Quick Check remains relevant and valuable in the evolving policy landscape. 43 | P a g e 5 Bibliography Court of Auditors. (December 2019). Annual Public Report for 2018. ESPON. (2011). The TIA quick check. Advanced version. Retrieved from https://www.espon.eu/sites/default/files/attachments/TIA_quick_check_advanced_version. pdf ESPON. (2021). ESPON TIA Tool 2020-2022. Moderators guide. Retrieved from https://www.espon.eu/sites/default/files/attachments/TIA-Tool_moderators-guide_20.pdf World Bank. (2021). Report on the practice of territorial impact assessment and impact forecasting of infrastructure investment, with three case studies. World Bank. (2023). Report with specific recommendations for improving the local development strategies based on international best practice. 44 | P a g e Competența face diferența! Proiect selectat în cadrul Programului Operațional Capacitate Administrativă cofinanțat de Uniunea Europeană, din Fondul Soci al European Competence makes a difference! Project selected under the Administrative Capacity Operational Program, co-financed by European Union from the European Social Fund