Just 33.1% of EU funds available to Malta under the 2007-2013 financial framework have actually been paid out, MEP Edward Scicluna said Friday morning.
The MEP obtained this information through a parliamentary question he posed to the European Commission.
In his reply, Regional Policy Commissioner Johannes Hahn noted that Malta “shows a good performance in the implementation of cohesion policy, with 80% of available funds allocated to specific projects.”
But the Commissioner did point out that there was a “slight delay in the financial absorption of funds compared to the EU average,” attributing this primarily to the slower implementation of projects.
A total of €840 million had been allocated to Malta under the 2007-2013 financial framework, through the Cohesion Fund, the European Regional Development Fund and the European Social Fund.
The ERDF accounted for more than half – €444 million to be exact – of the total allocation. But just €144 million (32.5%) were paid out by 31 October, 2012.
A total of €284 million were allocated under the Cohesion Fund, of which €103 million (36.4%) had been paid out. The ESF accounted for the remaining €112 million, of which €31 million (28%) had been paid out.
All in all, therefore, €278 million in funds have been absorbed by Malta so far, amounting to 33.1% of the total. But €80 million of these are in the form of advance payments, which have to be returned if the projects are not implemented.
In his reaction to the figures, Prof. Scicluna stressed that the funds allocated under the 2007-2013 framework have to be spent by 2015. This leaves €562 million – €642 million if advance payments are excluded – in funds that have to be secured in just over two years.
He noted that although the government has claimed that Malta is one of the best performers as far as the utilisation of EU funds is concerned, the reality is considerably different. He added that past budgets have consistently shown that capital expenditure fell behind predictions.
The MEP – who is contesting the next general election – said that whoever is elected to government next year has to absorb over €600 million after the present government only managed to secure €200 million in six years.
But, in a government reply on Friday evening, it noted that as is stated by the European Commission in its reply to MEP Scicluna’s Parliamentary Question of 8 October 2012 (Commission reply E-009027/2012, dated 6 December 2012), "Malta shows a good performance in the implementation of cohesion policy, with 80 % of available funds allocated to specific projects.” Indeed, this is among the highest absorption rates of Member States.
It should be noted that the figure of 33% quoted by MEP Scicluna actually refers to the funds reimbursed by the Commission to Malta so far. Requests for payments are sent by Malta on a continuous basis and, in fact, the amount requested by Malta on the programmes to date stands at 37% with the next request expected to be sent to the Commission by year end.
It is a known fact that the bulk of payments for projects are paid at the completion of the projects. This is a common and standard practice, in line with EU rules. If one were to take the status of payments of the previous (2004-2006) Programme at the same time of implementation ( which would be end of 2006),the payment rate paid by the Commission stood at 30%. Malta has managed to maintain and actually improve this rate in the current period with a Programme which is 10 times larger than the previous one and which for the first time has a number of major projects which are by their very nature more complex to implement. Malta managed to absorb all the funds under the previous period and the Government is monitoring closely the current Programme to ensure that steady progress continues to be made. One should note that NO funds have been lost and none are at risk at this stage, while payments on the Programmes can be made until the end of 2015, which can be checked and claimed by Malta even after this date.
Moreover, it should also be noted that the Government fully agrees with MEP Scicluna’s comments that funds need to be well managed. In this regard, Malta has an excellent track record and has a rigorous process for assessing project bids and ensuring that obligations are met. Indeed, Malta’s strong implementation and control system is held in such high esteem that the Commission has recently informed Malta that it will rely on the Government’s own control systems (article 73 of Regulation 1083/2006) for audit and control.