The European Commission has established that Malta breached EU regulations on the use of funds for the Coast Road project, a spokesman told this newspaper.

The government disputes that it has breached any rules, though it has informed Brussels it was accepting to make a “financial correction”, which works out at about €11 million, in connection with the project.

It was the European Court of Auditors which flagged the irregularities last year. It found that Transport Malta had negotiated directly with one company a contract whose value exceeded EU-set thresholds and without a proper call for bids being made.

Branding the irregularities “an example of serious failure in EU procurement rules”, the Court of Auditors recommended that the Commission withhold 25 per cent of EU funds allocated to the project, amounting to about €11 million.

A Commission official told this newspaper that, following the Court of Auditors’ recommendations, Brussels had studied the case and concluded that claims of irregularities were justified.

“The Commission has now completed the assessment of the conclusions of the Court of Auditors and, last month, informed the Maltese government of the amount of financial correction to be applied to the EU-funded contracts affected by the irregularities. Malta has one month to make its comments,” the official said.

When contacted, a spokesman for Parliamentary Secretary Ian Borg said the government had already replied.

“While reiterating our position on the findings of the Court of Auditors [that Malta did not break rules], we took note of the recommendations made by the Commission,” the spokesman said.

“In fact, the relevant financial adjustment suggested was already carried out during 2015 and all the respective funds were utilised in time for other projects by the end of 2015.”

The government insists none of the EU funds were lost because, instead, they were diverted to other projects. According to Deputy Prime Minister Louis Grech, the €11 million ‘lost’ in relation to the Coast Road project were utilised as part of a €15 million investment in education.

This investment included the procurement of about 7,000 laptops for teachers, LSAs and kindergarten assistants.

In a statement last month, it said the funds were part of 25 per cent of the investment for the Coast Road, “which had been reassigned after a financial correction”.

It said the “government was prudent in making the financial correction and this was acknowledged by the European Commission”. It also insisted that the contract was awarded following a public call for tenders and after seeking the advice of the Department of Contracts and the Attorney General’s Office to negotiate with the cheapest bidder.

ivan.camilleri@timesofmalta.com

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.