European Commission President Jose Manuel Barroso has sent a letter to the Bulgarian government in which he emphasizes explicitly Bulgaria's failure to utilize EU funds for infrastructure and water projects.

While Barroso's letter expresses hopes for improvement of the situation based on certain actions of the Bulgarian Cabinet, it outlines Bulgaria's inability to date to take advantage of the money allocated to it under EU's Structural and Cohesions Funds.

The EC President points out that Bulgaria has absorbed only a tiny share of the money made available to it by the EU under these mechanisms.

"As you probably know, the real level of absorption at the present moment amounts to 6% of the total EU budget allocated for 2007-2013, which is insufficient for achieving positive effect on the economy as well as for preventing potential losses of EU funds for Bulgaria," Barroso's letter to the Bulgarian Prime Minister and Cabinet reads.

It underscores the urgent need to address the main challenges in the various sectors, and to take decisive measures in order to fix the delays of large-scale EU-funded investments.

Barroso points out that a thorough analysis of Bulgaria's absorption of EU funds shows that the greatest issues are in the drafting and execution of large infrastructure projects for roads, railways, and the water sector, where only 1% of the total potential EU funding has been absorbed to date.

The EC President says that the major beneficiary of EU money in the road construction sector, the Bulgarian Road Infrastructure Agency, has been unable to overcome its major problems; not a single project has started in that field in Bulgaria since the start of the program period, while key strategic projects such as the Struma Highway have been delayed.

He recommends the urgent inclusion of "alternative structures" that can become beneficiaries of EU programs and speed up the realization of the respective investments.

According to the Barroso letter, the situation in Bulgaria's railway sector is no better, with the National Railway Infrastructure Company being unable to achieve the first stages of its set goals; less than 10% of the potential resources have been employed in the initial phases of specific projects.

The EC President says there are two major reasons for the delay of EU funded projects in Bulgaria's water sector – the lack of administrative capacity in the Bulgarian local authorities to prepare decent project proposals, and the delay of the overall reform.

He suggests that the "interested institutions" - the Ministry of Environment and Waters, the Ministry of Regional Development and Public Works, and the municipalities must create efficient coordination mechanisms among themselves.

On a more cheerful note, Barroso recognizes the commitment of the Borisov government to improving the situation.

"The commitment demonstrated by the ministers and deputy ministers who are directly in charge of the realization of various operational programs and the appointment of a special minister for the management of EU funds is of extremely great use for Bulgaria," the EC President notes.

He further points out that several international financial institutions have offered to help Bulgaria with reforms and improvement of its administrative capacity during a working meeting organized by Bulgarian EU Funds Minister Tomislav Donchev.

"In this respect I deem feasible the proposal, together with the Commission and the international financial institutions, under the leadership of the Minister for managing EU funds, to take steps to discuss, develop, and adopt an action plan for each of the above-mentioned sectors," Barroso recommends.

He further pledges all-out readiness on part of the Commission to support the Bulgarian institutions in order to speed up the quality realization of projects and the absorption of EU funds – as part of a joint initiative of the Bulgarian authorities, the EC, and the international financial institutions.

"Dear Mr. Prime Minister, I am convinced that with your personal support and the commitment and efficient coordination between the Bulgarian institutions and the European Commission, with joint efforts we will manage to overcome the existing serious difficulties, and problems, and will guarantee the successful execution of the Cohesion policy in Bulgaria," Barroso concludes.

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