The European Commission (EC) has not been persuaded that the funds allocated to Bulgaria's road infrastructure authorities under the Ispa pre-accession aid programme have not been the embezzled, according to a letter published by Bulgaria's Finance Ministry on its website on August 14.

The letter, signed by Dirk Ahner from the EC directorate general for regional policy, was sent on July 22 and said that without "denying the actions your services have made so far in seeking remedy to the significant shortcomings in the management and control systems, they have not managed to give the Commission sufficient assurance that Ispa/cohesion funds have not been subject of severe mismanagement or fraud."

"A number of important decisions resulting from the audit enquires still need to be taken and the related actions effectively implemented," Ahner said in his letter.

In the same letter, the EC official notified Bulgaria that funds under two projects - the Lyulin highway on the stretch between the Sofia ring road and Daskalovo, as well as technical assistance for preparation of road projects along the trans-European transport network (TEN-T) - were frozen.

Bulgaria's National Road Infrastructure Agency (NRIA) "is the sole beneficiary of an entire priority axis in the operational programme transport for the 2007-2013 period with a budget of more than 1 billion euro. I am sure you will agree that it would be unacceptable to continue payments with even the slightest doubts about the integrity of the [NRIA], given the severity of the shortcomings that have been detected in the on-going cohesion fund projects, the cases of fraud and conflict-of-interest", the letter said.

The EC has frozen funding to NRIA's predecessor, the National Road Infrastructure Fund (NRIF), in January, when a media investigation showed that NRIF head Vesselin Georgiev awarded contracts worth tens of millions to a company in which his brother was a director.

The letter gave Bulgaria three conditions for the suspension on payment of funds to be lifted - to further investigate whether there was any conflict of interest or misuse of cohesion fund money; to adopt a new action plan that would address the deficiencies in the NRIA structure that were pointed out in a report by consultancy firm KPMG; and to update the description of the management and control systems at NRIA once its restructuring is complete.

Bulgaria's Finance Ministry has already ordered a new audit of the road infrastructure agency, to be carried out by KPMG, a Finance Ministry spokesperson told Dnevnik daily. The extensive action plan adopted earlier in August to deal with the criticism from the EC's monitoring reports made public on July 23, included specific measures for NRIA as well, the spokesperson said.

Source: sofiaecho.com