ECA : PHARE PROJECTS IN ROMANIA AND BULGARIA OVER AMBITIOUS

EU funds go down the tube in Romania and Bulgaria.

European Court of Auditors released a report in Brussels Tuesday in which PHARE projects in Romania and Bulgaria are estimated as over ambitious.

Portal EUROPE offers you the full text of the report here; and above are two comments of the foreign media on this sensible issue.

rs04_06en.pdf (188.54 Kb)

PHARE pre-accession assistance for both countries proved to be not fully effective between 2000 and 2004 the report says as quoted by EUexpands.

The Court criticizes the EU Commission's overall management of investment projects as the EU executive allocating the funds “overestimated the management capacity of the public authorities in Bulgaria and Romania and often agreed over ambitious targets and deadlines”, the reports reads.

It also neglected the principles of sustainability and co-financing and it did not consider enough the expected added value and the catalytic effect of PHARE money in activities led by international financial institutions.

The audited projects were generally in line with the overall investment objectives of PHARE, namely to facilitate alignment with EU norms and standards and to assist in the context of Economic and Social Cohesion programs.

However, at the time of the audit for over half of the investment projects audited the assets were not, or were only partially, being used for the intended purpose.

Outputs and results lagged considerably behind schedule, sometimes by up to two years, as it appears from the report.

These shortcomings were due to the continuing lack of administrative capacity and national resources. This illustrates the need for the National Authorities to make further substantial efforts to finalize the projects and to achieve the underlying project objectives, the Court of Auditors says.

EUobserver adds,  EU funds go down the tube in Romania and Bulgaria; saying also that the report is “hard-hitting, criticising Brussels for failing to ensure effective spending of EU funds in Romania and Bulgaria, with EU-funded computers left unused and swimming pools staying empty.”

The report presented on Tuesday (20 June) by Maarten Engwirda, a member of the court, provides a painful assessment of the use of so-called Phare money from Brussels by Bucharest and Sofia, which are aiming to enter the union on 1 January.

Phare funds are channelled by the European Commission to candidate states in order to prepare their administrations for accession, as well as to boost economic competitiveness.

But a large part of the cash ends up in a black hole, the court found in an audit which covers projects initiated from 2000-2004, involving €511 million of Phare cash for Bulgaria and €1.4 billion for Romania.

"At the time of the audit for over half of the investment projects audited the assets were not, or were only partially, being used for the intended purpose," said Mr Engwirda.

"Outputs and results lagged considerably behind schedule, sometimes by up to two years," he added.

The court said in a statement that it "criticises" the commission for its "overall management of investment projects."

Among other issues, the auditors found that Brussels "overestimated the management capacity of the public authorities in Bulgaria and Romania and often agreed overambitious targets and deadlines".

The report lists a number of non-functioning, half-finished and in some cases apparently useless investments, with Mr Engwirda himself highlighting a €3.1 million bridge linking Romania and Moldova completed in December 2004 with no access road on the Moldovan side.

The Moldovan road has meanwhile been finalised, commission officials noted.

The Bulgarian public prosecutor's office was granted a €1.8 million computer system, but 37 work stations were not used but put in a store room instead, while Bulgarian border police are seemingly not very keen to use EU-funded four wheel-drive jeeps.

"The usual fleet of the [border police] is a Russian-built car, costing one third of the price of the car delivered under Phare and with cheaper spare parts," said the report.

A Romanian tourism development area was found to contain "an eyesore, an empty, degraded Olympic-size swimming pool," while a newly-built asylum centre was reported to have an occupancy rate of 7.6 percent.

A commission spokeswoman reacted by saying that "the commission has already corrected a number of issues of the report," adding that a "majority" of unfinished projects had meanwhile been finalised while Bucharest and Sofia have boosted administrative capacity.

"It is important to stress that the report has not highlighted any cases of fraud," she said. "This shows that the authorities [in Romania and Bulgaria] have worked very efficiently to detect fraud."

But Mr Engwirda warned that the commission's own pre-check on irregularities in Phare spending will disappear once Sofia and Bucharest enter the union and become eligible for structural funds without Brussels tutelage.

"They have to improve their own capacity and control so that no irregularities take place," he said.

Court officials expressed sympathy for one idea from the commission to temporarily exclude Romania and Bulgaria from EU subsidies if their administration is not in order before accession.

But Romanian and Bulgarian diplomats offered assurances that their countries are making "every effort" to be ready to absorb EU cash once they are in the union, with the commission expected to recommend a January 2007 entry date in a key autumn report.

The Phare revelations follow news in April that the commission's €450 million a year TACIS development programme for the post-Soviet region also wasted cash on badly planned projects.