EU Freezes 300 Million Euros in Funding for Water Projects

The European Commission (EC) has temporarily put on hold some 300 million euros in payments due to issues concerning spending management and oversight at the ISPA executive agency with the Bulgarian environment ministry.

An EC letter dating to December 2006 obtained by Dnevnik says the problems, especially those concerning the tendering of public procurement contracts, create an unacceptable risk for misspending of EU funds.

The first secretary of the EC delegation to Bulgaria recently warned that the absorption of ISPA and Phare is stalling. Bulgaria had on obligation to accredit four agencies each to administer the ISPA and Phare funding. A single Phare agency is yet to be accredited.

Under the ISPA program, the environment ministry is the only one yet to get an accreditation. However, it is the ministry to which the government transferred in late 2006 all water supply and wastewater treatment projects that had not yet kicked off.