This new system will be applied as of the end of July, people close to the matter told MEDIAFAX.
Up until now, the European Commission allotted 15% as a down payment for project pre-financing, while the Government covered the difference up to 30% of the contract value.
However, many companies that receive pre-financing fail to later send the authorities their expense bills, so the ministries in turn are unable to request reimbursements from the EU and the Commission denies further funds until these gaps are covered.
MEDIAFAX wrote earlier this month that the Government is considering reducing the pre-financing ceiling to 15% of the contract’s value, as many of the companies which contract EU funds fail to provide documents to justify how they used the money.
According to this new system, up to 10% of the project’s eligible value will be provided as pre-financing, in at least two installments, except in the case of major projects, for which the pre-financing cap can be 20% (compared to 40% currently). The first installment will make up at least 5% of the project’s eligible value (compared to 15%) and the remaining installments will be provided only after authorized expenses amount to at least 60% (compared to 40%) of the combined value of the previous installments.
An exception will be made for projects whose contracts, decisions or financing orders state that only up to two reimbursement requests may be filed; pre-financing will be provided in a single installment.
Projects that are considered state aid may receive pre-financing of up to 35% of the total value, in a single installment.
The EU fund management authorities will be tasked to recover the entire amount of pre-financing provided for projects whose beneficiaries have sent no reimbursement request within four months of receiving the money.
In the case of projects whose beneficiaries do not send reimbursement requests for at least 20% of the pre-financing value within six months of having received the money, the authorities will be required to recover the unused part of pre-financing.
The sources said currently more than two billion lei (EUR472 million) has been allotted for pre-financing for various projects which sent back no refund requests.
To receive pre-financing, a company must open an account to only be used to receive the funds and spend on the project, including granting contractors down payments or transferring money to its partners.
Two weeks ago, Prime Minister Emil Boc said the ministers have been tasked to terminate EU-funded contracts whose implementation is unjustifiably overdue or which have been awarded through fraudulent auctions, a decision prompted by the very low level of EU reimbursements. He had said earlier that a contract might be terminated if no work has been done on the project six months after signing.
President Traian Basescu said last week that he has asked the Government not to send any more invoices to Brussels for refunds, for the time being, with the exception of bills for agriculture projects.
The European Commission reimbursed Romania around EUR650 million by June 24, 2011, for projects financed with EU funds, meaning about 3% of the total EUR19.7 billion allotted for 2007-2013.
(EUR4.2323)