The European Commission is investigating whether the government breached EU public procurement rules over a tender connected with the construction of the new Coast Road.
However, it has not yet decided whether it will withhold any funding from the project.
The EU had allocated €42.3 million to the Coast Road, or 85 per cent of the estimated €50 million cost eligible for EU funding. Malta was to foot another €10 million of the bills.
Last week however, the Parliamentary Secretary responsible for EU funds, Ian Borg, announced that the government had decided to fork out an additional €11 million from national funds after the EU flagged up problems with the tendering process.
He said the country would not actually be losing any funds as those €11 million from the EU were to be used on other projects.
A spokesman for the European Commission has now confirmed that Brussels is investigating a possible breach of public procurement rules on the project but stressed that no funds had yet been withheld.
The Commission has not taken a decision on the withholding of EU funds
“The (Coast Road) project was audited by the European Court of Auditors as part of the Statement of Assurance for financial year 2014. The audit found non-compliance issues regarding the Public Procurement Directive,” the spokesman said.
“The Commission has not taken a decision in relation to a possible withholding of EU funds to the project. The Commission is assessing the conclusions of the Court of Auditors report and will draw its own position, taking into account the guidelines expressed in Commission Decision C(2014) 9527, and will inform the Maltese authorities accordingly.”
Last night, in answer to questions, the government said it was in line with public procurement regulations, pointing out the Commission had not yet taken a formal position on the Court of Auditors’ findings.
It also explained, however, that out of prudence it had adjusted the financial allocation in order to safeguard the use of EU funds, particularly because eligibility was due to expire at the end of this year.
“Funds were not lost but they were diverted on to other projects in education and environment as already explained by the government.”
The government also said that it had actually saved about €30 million following negotiations over the tender issued by the previous government.