Updated 7.30 p.m. - The government explained this evening that is making full use of EU funds allocated to Malta.
It was reacting to a statement by Labour MEP Edward Scicluna who has asked the European Commission why Malta is receiving payments that barely cover its own contributions to the EU budget.
In a parliamentary question to the Commission, Prof. Scicluna noted that under the seven year EU financial framework 2007-2013 Malta was allocated €855 million to fund projects covered under cohesion policy, an average of €122.1 million per year.
But according to the Commission's latest financial report, in the EU budgets of 2007, 2008 and 2009, Malta only received around half of this allocation.
Prof Scicluna said:
"The government often talks about the huge amounts of EU money coming to Malta, but the Commission's figures show that we are receiving barely half of the money we were allocated.
"I want to know why Malta is not seeing this money, whether it is because government authorities are not preparing suitable projects or are failing to complete the projects when EU funding has been provided."
Prof. Scicluna noted that the shortfall was of potentially €200 million to €300 million.
"Most EU countries would be envious of Malta's cohesion funds, but we seem unwilling to spend them."
Prof. Scicluna also looked at the terms which allowed an EU-funded project three years to be completed, and asked what funds were at risk because of a failure to complete projects within the timescale.
He said:
"We are rapidly approaching the start of negotiations on the 2014-2020 budget cycle. My fear is that if we are not allocated the remainder of the €855 million by the stipulated dates we will lose that money for good.
"It is time we found out what will happen to the unspent cohesion funds," he said.
GOVERNMENT REACTION
In a reaction, the government explained that the Cohesion Policy budget operates on a seven-year programme with a nine-year implementation period.
"Prof. Scicluna ought to know that Member States are not given time-frames of two or three years for the implementation of individual projects under the Programmes, there is no requirement to spend the funds equally on an annual basis and the last payments on projects can be made by Malta until the end of December 2015. This makes sense since the majority of the programmes are major investments in infrastructure, equipment and schemes, each of which requires a separate and unique planning and implementation process."
In this specific programming period, given the global financial and economic crisis of 2008 and 2009, Member States had been granted a four year moratorium (i.e. a period in which the country is not required to declare expenditure) so that more time could be allocated to preparing the required projects (including detailed studies involved), obtaining planning and environmental permits and carrying out the public procurement exercises required. All these processes normally took up the initial two to three years of the programme’s initial life-time. This meant that 2011 was the first year in which expenditure must be declared to the European Commission following the four year moratorium.
"Notwithstanding an arduous implementation phase, largely caused by delays which at times slowed down the process due to complex project selection and contract award processes (including appeals), as well as regulatory issues, Malta’s allocation for 2011 has already been spent and reimbursed by the European Commission. This achievement should not be underestimated, though all authorities must continue to strive to improve and be ahead of targets. It is pertinent to note that all funds requested to date have been paid in full by the European Commission with no financial corrections or deductions."
The government also noted that although the Programming period was not yet at its half-way mark till its end in 2015, over 70% of the Funds earmarked for Malta had already been allocated to over 130 projects. The projects cut across the economy and includde roads and ports (including a new terminal in Ċirkewwa); the rehabilitation of Maghtab and other landfills; the waste water treatment plant in the south of Malta; the new oncology hospital; upgrading of laboratories across the education system (including schools and the University of Malta); the extension of MCAST and a new faculty for ICT at the University of Malta; upgrading of industrial estates; the restoration of fortifications in Gozo, Mdina, Valletta and Vittoriosa; conservation and visitors’ centres in various historical sites including the Ċittadella and Tarxien Temples; the upgrading of squares and promenades; scholarships; tens of employability and inclusion measures; a range of new courses at MCAST; schemes for enterprises; and various schemes for renewable energy and energy efficiency.
"It is clear that the Programmes are well on track. Now that most of the regulatory issues as well as the complex procurement procedures for many projects are well underway, expenditure is expected to accelerate even further".
"The method of distribution of the funds is publicly available knowledge. Prof Scicluna should inform himself before making such incorrect statements," the government added.