Bulgaria Stands to Lose EUR 120 M SAPARD Funding

Bulgaria stands to lose up to a quarter of its pre-accession EU funding from the SAPARD program, which comes to an end this December. Photo by BGNES

Bulgaria will have succeeded in absorbing 73% of the total EUR 445 M earmarked for the country’s agricultural pre-accession EU SAPARD funding program, which closes at the end of this month.

This means that Bulgaria will lose around EUR 120 M of the available financing, according to Silvia Indzhova, Director of the National Fund of the Bulgarian Finance Ministry, which handles all EU project funds.

"Unfortunately the assessment on its completion is pessimistic", she told the Bulgarian Parliamentary Committee on European Affairs on Wednesday.

Indzhova stated that the accumulation of unused SAPARD funds began after the signing of the 2004 Financial Memorandum. Until that time, Bulgaria had a 100% absorption and implementation record.

However, the rules allowed for a defined annual amount to be carried over for up to two years. In 2004, EUR 27 M were “left over”; in 2005, the sum was EUR 45 M; and for 2006, the expected total is EUR 47 M.

The new governmental management hoped to limit the losses through checks already initiated for irregularities in a number of projects totaling EUR 12,5 M. If some or all are found to be in order, the loss will be further minimized to some degree.

If the Finance Ministry, along with prosecutors and OLAF officials, succeed in identifying such projects before a deadline of December 23, 2009, full payment may be requested, thereby diminishing the overall loss.

If those checks are not completed until early 2010, scheduled projects will have to be funded from the Bulgarian state budget, Indzhova explained.

Most of the suspect projects are in the meat processing sector. Some irregularities are minor technicalities, for example, a bank guarantee for performance not initially requested, but afterwards rectified.

However, there have been some major violations, such as awarding a contract, not to the winner, but to a lower-rated competitor, that have rendered an entire project void in funding terms.

Indzhova added that she also hopes to receive by Christmas all conformity assessments of operational programs, which have already been returned twice with a negative opinion of the commission.

By the same time, she hoped to get the first EUR 25 M of Phare funding. There had been no payments until now, as the EU commission had not transferred even one cent of the EUR 64 M, said Indzhova.

She also pointed out that for the past four months there had not been any payments for the so-called twinning projects. Funding under ISPA and Schengen had, however, not been delayed or stopped, she reported.

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