Malta spending all EU funds

Malta is well on track to using up all the funds allocated to it until 2008 by the European Union, Finance Ministry Parliamentary Secretary Tonio Fenech said yesterday.

By June the island had absorbed over 70 per cent of monies granted to it from the European Regional Development Fund (EDRF) and almost half of that allocated under the Cohesion Fund.

Speaking at a press conference yesterday, Mr Fenech said that of the €46.7 million allocated from the EDRF, Malta had already received €33 million, or 71.2 per cent. Malta had also received 48 per cent of the €21.9 million from the Cohesion Fund.

In both cases the remaining funds were committed on projects that were in hand and which would be completed in time by the end of 2008, so that the money spent on such projects would also be refunded. All funds committed for spending by 2007 had already been spent and refunded.

Mr Fenech said a recent report by the European Parliament showed that Malta had the least absorption rate for EU funds. But this was because the snapshot on which the report was based was taken before many of the major applications were submitted by Malta.

"The scope of the exercise carried out by the European Parliament was to see how reforms could be made to improve the ability to use the EU funds," he said.

Mr Fenech said the government was now considering another 74 applications, amounting to €170 million, under the ERDF within the EU's next budgetary period spanning to 2013. The applications are in five areas: Enterprise infrastructure, research and innovation, tourism, internal mobility and education and health.

Four projects from three government entities were submitted late and investigations are taking place in a bid to establish why this happened and who was responsible.

"Without passing any judgement before the facts are known, the message is loud and clear that we will not tolerate incompetence or mismanagement," Mr Fenech said.

The late applications were submitted by the Malta Transport Authority, the Malta Tourism Authority and the Ministry for Competitiveness. It did not mean that Malta would lose out on any EU funds, as the projects may not have been approved and the applications could be re-submitted under other calls made later this year. But things have to be done the way they should be done, insisted Mr Fenech.

"The EU funding runs until 2013 and there will be many more calls," he said. Malta can spend a total of €850 million from the EU budget until 2013.

Calls in the areas of transport, economic services and the environment will be issued later this year. Mr Fenech appealed to those submitting applications to do their homework properly and to stop squabbling about who gets which funds for which projects.

"While the right of appeal exists, we urge caution in using such mechanisms to avoid delays which might endanger the possibility of using the allocated funds. There will be enough contracts for those interested. Those who fail to get one can try to get another rather than everyone trying to get the same one," he said.

Funds at a glance

The European Regional Development Fund seeks to stimulate economic development in the least prosperous regions of the EU, thereby helping to redress regional imbalances. ERDF resources are mainly used to co-finance job-creation investment, infrastructure projects and activities of small- and medium-sized enterprises.

The Cohesion Fund finances expenditure on major projects involving the environment and transport infrastructure, as a way of strengthening cohesion and solidarity within the EU. Eligible member states are those whose GNP per capita is below 90 per cent of the EU average.