Construction Cos Seek BGN 1.2B in Late Payments for EU-Funded Projects

Business | August 4, 2014, Monday // 12:45| Views: 634 | Comments: 0
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Bulgaria: Construction Cos Seek BGN 1.2B in Late Payments for EU-Funded Projects Photo by bnr.bg

Construction companies have complained over the accumulation of a total of over BGN 1.2 B in unpaid sums for construction works covered by EU funding.

The complaint was reiterated Monday by the Bulgarian Construction Chamber in a second open letter to state institutions.

An earlier statement of the chamber in mid-July had put the sum at BGN 1 B.

The Chamber recently called on construction companies to freeze work on certain projects due to unpaid sums under EU operational programs.

In their Monday letter, construction workers insisted that the government provide the necessary funding through the upcoming budget update.

"Hundreds of small, medium-sized and big companies and suppliers of materials and services for the sphere of construction are on the verge of bankruptcy and thousands of workers and employees face the threat of ending up out of work and their families are on the brink of survival. The halt to payments under operational programs and the incapability of the state to recover payments from the European Commission for eight months has created a real threat of failure to implement construction contracts, thereby causing huge damage to the state as a result of the nonobservance of EU commitments," the Chamber said in its letter.

The Chamber drew attention to the two programs which were causing the most serious problems, with projects worth over BGN 2 B under the "Environment" Operational Program underway and unpaid sums amounting to over BGN 500 M and unpaid sums of over BGN 748 M under the Rural Development Program, over half of them being liabilities to construction companies.

The Chamber insisted that it could no longer afford to provide credit to the state, stressing that the construction sector was not to shoulder the burden resulting from the incapability of the state to fulfill its commitments.

The Chamber demanded that the authorities earmark BGN 1 B for the immediate resumption of payments under the state budget to construction companies during the vote on the state budget update on Monday.

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Tags: Bulgarian Construction Chamber, EU operational programs, Operational Program Environment, Rural Development Program, construction works, EU funds freeze, budget update
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