Bulgarian Municipalities Struggling with EU Environment Funds Freeze
The suspension of funding under operational program "Environment" is a serious challenge to municipalities according to Spiridon Alexandrov, head of its Managing Authority.
Alexandrov, as cited by the Bulgarian National Radio, explained Friday that there had been no case of suspended construction works so far, despite the slackened pace of work.
In November 2013, the European Commission froze funding under the program due to systemic breaches in public procurement in some Bulgarian municipalities. For a certain period of time, Bulgaria used money from the state budget to cover projects which were being implemented, but this funding was stopped in February.
Audits showed that it was not only municipalities but also units of the Environment Ministry that had to be penalized for flawed implementation of the projects, according to reports of investor.bg.
After the inspections of the Environment Ministry, auditors from the European Commission also examined a part of the projects, but no final statement on unblocking the program is available yet.
"The probe of the EC was concluded last week. In my opinion, it was wrapped up in a pedantic manner. We expect this to be the last step before funding under the program is restored," Alexandrov predicted.
He did not specify a deadline for the allocation of budget funds for construction works.
"In most of the municipalities, the implementation of the projects was underway during the inspections. A total of 239 public procurement deals were inspected and around 130 breaches were identified" he explained.
"No payments are being made under the projects now and this creates difficulties because we are in a construction season," Alexandrov said.
Asked whether the companies would be paid with budget funds, he said that it was up to the Finance Ministry to decide.
Alexandrov noted that talks with the Finance Ministry on the provision of a certain amount of funding were underway, adding that the local authorities had been left to cope on their own so far.
Emil Savov, Deputy Executive Director of the National Association of Municipalities in the Republic of Bulgaria (NAMRB), reminded that a number of municipalities had been served letters informing of serious penalties after the completion of the audits a few weeks ago.
He said that the Environment Ministry had been planning for 87 municipalities and Environment Ministry structures to be penalized with around BGN 180 at that point, stressing that the intervention of the NAMRB and the objections filed by municipalities had resulted in a substantial reduction of the corrections.
Savov noted that initial estimates indicated that the total amount of the penalties had been reduced from BGN 180 M to BGN 20-30 M.
Spiridon Alexandrov made clear that the final amount of the financial corrections was still being specified as the Environment Ministry was still receiving objections.
Asked about reshuffles at the Environment Ministry as Environment Minister Iskra Mihaylova was to go to Brussels as MEP, Alexandrov said that there would be an interim minister to replace her, adding that the NAMRB had requested a meeting with the Prime Minister Plamen Oresharski to learn about how the lack of political leadership would be alleviated.
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