Updated - Adds reaction from the Secretariat for EU Funds - The European Court of Auditors has decided to withhold payment of 25% of EU funds allocated to the Coast Road project – some €11 million – because of concerns over how contracts were awarded.

Parliamentary Secretary for EU Funds Ian Borg told TVM that his secretariat had drawn the attention of Transport Malta but it had needed to move on with the project. Had it issued a new call for offers, it would have caused delays and risked losing all the EU funding. The funding period closes in two months’ time. 

Transport Malta chairman James Piscopo said that the call for tenders was issued on February 19, 2013 and contractors wanted €83 million for the works.

Since this was well over budget, negotiations were carried out under the guidance of the Public Contracts Directorate with all contractors and the price was dropped.

The contract, for €53 million, was finalised in January last year and works started the following April. They are expected to be concluded by the end of this year.

Action is being taken for Transport Malta to be able to use the withheld funds on other projects. Some of the funds are also being used  to credit tallinja card users.

SECRETARIAT EXPLAINS

In a reaction, the Secretariat for EU Funds said the European Court of Auditors (ECA) audit was part of its normal annual audits done on the basis of a sample of expenditure claims paid by the Commission in the previous financial year (2014).

The ECA undertook an audit on four large projects being implemented in Malta under the Cohesion Fund.

No issues, of a financial nature, were identified on the other three projects in the ECA sample.

"The outcome of the audit is for the Commission to take note and take the necessary action it deems fit. It is not the ECA that decides on the financial corrections, if any, to be imposed by the Commission on the basis of the ECA findings," the Secretariat said.

"Following feedback submitted by Malta to the draft ECA report earlier this year, Government was informed about the position the Commission was likely to take on the basis of the ECA findings.

"Malta took into consideration the Commission advice, although maintaining its reservations, do the necessary financial adjustment to the project and re-use the funds on other projects. Hence the 25% financial correction on this project carried out by Transport Malta, were reinvested in other projects for environment and the educational sector and therefore Malta is not losing the funds."