Each day it becomes more and more obvious that Bulgaria would miss the opportunity to acquire 3 billion levs from the EU funds. However, this is the optimistic scenario – if the political crisis in the country does not deepen. Otherwise Sofia may say goodbye to between 4.5 billion and 5 billion levs, or about one-third of the operational programmes’ volume. Apart from these calculations stays the programme for rural development, which has already lost tens of millions and in any situation will continue to lose more.
This bleak picture is unfortunately not taken out of someone’s political statement but reflects reality itself. The unpleasant truth has been notified by the European Commission in its strategic Cohesion Report, which was published in the spring, but got lost somewhere in the election turmoil. Four months later, the situation is not much different. The information system on management and monitoring of EU funds shows that now the actually disbursed volume funds for the seven operational programmes come to only 6,652,776,270 levs, or 42.42% of the total budget, which is nearly 15.7 billion levs. The progress against April is about 4%, and if the speed is maintained in the remaining months of the year, the country can not absorb more than 48 %. The plans of the former Minister of EU funds Tomislav Donchev were to end 2013 with at least 60-65% of disbursed amounts. The discrepancy between reality and intentions come to about 2 billion levs.
At the same time the former rulers of the GERB party allowed in 2012 an over-contracting of resources with the idea to ensure a good result in case of failures of more projects. In practice, contracts were signed and for some of them there is no real cash, and this might lead to paying from its own funds. Today the overlapping sum is about a whopping 1.2 billion levs
uncovered by EU funds.
It is likely that by the end of this year (when the deadline for negotiating expires) the amount will swell to at least 1.5 billion levs.
Paradoxically, on the one hand, the payments are halted, and, on the other, the state has approved proposals far beyond its resources. Absolute record holder in this regard is the Environment programme. With a budget of 3.5 billion levs it signed contracts for almost 5.6 billion levs and thus the overcontracting comes to 152%. The absorbed funds, however, are only 941.7 million levs (26.74%), which is a significant improvement compared to April 2013, when the figure was about 700 million. But even at this rate, the programme will hardly be able to absorb even half of the funds available at the end of the programme period. The delay is so significant that no catching up with the work is possible, and the question is no longer whether but how much the country will lose.
The problem comes from the fact that work is being done on very few projects approved for funding. Among them are those for integrated water cycles of Gabrovo and Vratsa, and the system of facilities for treatment of municipal solid waste in the municipality of Sofia. Their total value is 620 million levs, but the resources absorbed so far are respectively 40.5 million levs, 36.7 million levs and 68 million. Good progress has been done on the integrated water cycle of Pridop where 34 million lev were quickly disbursed, but under the contract for the water treatment plant and sewage network of Kostinbrod, which comes at close to 100 million levs, has seen less than 20 million levs paid. The same is the situation in Pomorie, whose contract is for 96 million levs. On the key project Collection, treatment and disposal of waste water from agglomerations Nessebar, Sunny Beach and Ravda worth 95 million levs only 4.6 million levs has been paid while the figure is zero for the two major projects of the Ministry of Interior – the one to combat forest fires and the other one for floods, for which were envisaged nearly 200 million levs.
Even more dramatic is the situation
with waste. Bulgaria had to build 56 regional landfills and to close down 191 old landfills by mid 2009. To avoid solid sanctions from Brussels, GERB government contracted a postponement of the deadline until the end of 2013. However, this date will not be met, either. From 23 regional landfills only two have been opened – in Botevgrad and near Sofia. And for those that are not completed by the end of 2015 the country will have to seek money from the state budget, as the new programming period provides no funds for landfills.
The Competitiveness programme which can significantly improve the country’s economy is also in a critical situation. On paper the utilization of funds is going more or less well – so far what is paid come to more than 1.11 billion levs, or 49.16% of total 2.27 billion. According to this indicator Competitiveness even ranks first. In reality,
businesses have received less 400 million levs.
The reason for the drastic difference is that the total includes 682.5 million levs in from the JEREMY tool, which are absorbed by the European Investment Fund and would be granted to companies in the form of loans, but the process has been bogged down, and these are loans not grants. Another 17 million levs has been absorbed by the Ministry of Economy, Energy and Tourism, and the other nearly 15 million levs has gone to the Executive Agency for Promotion of Small and Medium Enterprises.
Expectations that the tenders for e-government will stir up tangibly operational programme Administrative Capacity did not materialize. It is true, that some acceleration of payments has been spotted there – the funds absorbed for the first seven months of this year were equal the ones for the entire 2012, but the overall progress remains extremely low.
One could easily give
weak evaluation for the Human Resources programme
and its invisible contribution against unemployment in the country, although the amounts paid here are growing steadily.
As with the programmes Regional Development and Transport, there everything seems to be much nicer. Since the beginning of 2013 the money paid under the first one increased by almost 15% – to 1.4 billion levs, and now come to 45% of the total budget. With over 1.8 billion levs (48.5% of the budget) paid, the second one is at the top by volume of the spending. It is noteworthy that about 668 million levs of this sum was used in 2011 and 829 million levs – in 2012. However, one can hardly expect great results this year as major infrastructure projects have already been concluded. Therefore, for the first seven months was paid only 183 million levs. And for the negotiation of new projects under the Transport there cannot be a case, since the budget is distributed at 99%.
Ultimately, if the government really gets down to work, it is realistic to achieve a total absorption of EU funds in the amount of about 80 percent. This is a very good result considering that in the first programming period even older EU member states rarely exceeded this threshold.
The BANKER
