EU auditors yesterday called the procedure used by Transport Malta in connection with the procurement of a contractor to do works on the EU-funded Coast Road project as “an example of serious failure in EU procurement rules”.
In its 2014 annual report auditing EU spending, the European Court of Auditors said that, out of four Maltese projects audited last year, two were found to have irregularities.
Focusing on the Salina Coast Road project, the ECA said the direct award of works to one contractor was “unjustified”.
“In a Cohesion Fund project in Malta related to the reconstruction and upgrading of a motorway section of the TEN-T road network [of the length of seven kilometres] the contracting authority [Transport Malta] negotiated directly a contract above EU thresholds with one company without a proper call for competition,” the EU auditors found.
“Thus, the declared expenditure for this contract is ineligible.”
It is the role of the commission to follow up any irregularities we find
The ECA did not name the other Maltese project, which it said was found to have irregularities and which “infringed EU state aid rules”. Asked to give more details about the two Maltese projects which were found not to have observed strict EU funding rules, a spokesman for the ECA said he could not give more details.
“As the EU’s external auditors, our role is to provide independent evidence of the regularity of EU spending and effectiveness of control systems. “It is the role of the European Commission to follow up any irregularities we find.”
A few weeks ago, the government pre-empted the ECA’s publication of its finding on irregularities in the Coast Road project and said it had decided to shift elsewhere €11 million of the EU funds dedicated to this project. According to the government, the move was made so that the EU funds lost on the Coast Road would still be utilised in other EU-funded projects.
Despite the government’s decision, so far the Commission has not yet decided whether to uphold the conclusions of the EU auditors, in which case action might be taken against Malta. A spokesman for Parliamentary Secretary Ian Borg, responsible for EU funds, yesterday confirmed that the alleged Coast Road irregularity was committed by Transport Malta.
Asked to state why Transport Malta had negotiated directly without a call for competition, the spokesman said that tenders were issued in 2012. However, he did not state what happened during the direct negotiations cited by EU auditors.
Asked to say who was going to shoulder responsibility over this alleged infringement of EU rules, the spokesman said: “It is premature at this stage to talk of infringements as the ECA report is now with the Commission for its perusal.”
Sources told this newspaper that the direct negotiations conducted by Transport Malta in 2013 had led to a new contractor being given work on the project.
The Coast Road project had to be concluded by May 2015 at a cost of €53 million. The road was opened to traffic recently, but works are still under way.