Updated | Government contradicts MEP's claim of low funds absorption

Labour MEP Edward Scicluna has called for improved management of EU funds, after revealing that up till the end of 2012 only 33% of Malta's funds had been spent in capital projects.

Malta has up until 2015 to fully implement its €840 million in EU funds under the ERDF, cohesion and ESF instruments allocated for the 2007-2013 financial framework.

"Up until now, Malta has only absorbed €278 million - or 33% - of these funds, €80 million of which are advance payments," Scicluna said.

"Within the next three years Malta must absorb €600 million of these funds, but this requires better management of these funds."

Scicluna said that a reply from a PQ he submitted to the European Commission showed that Malta had a slower implementation of projects on the ground, although it had one of the highest allocation rates of EU funds.

"I know of cases where EU funds have been lost... and this is down to the fact that funds must be administered more carefully. Funds can be lost through bad management and a lack of skill. Labour will morally back the government to get more funds," Scicluna said.

According to EU data seen by MaltaToday, Malta's unclaimed European Social Funds [opens PDF] are at 74% of the total 2007-2013 allocation.

In its reaction, the government said Malta showed "a good performance" in the implementation of cohesion funds, as stated in a reply by the European Commission to Scicluna's PQ of 8 October 2012, with 80% of available funds allocated to specific projects.

"Indeed, this is amongst the highest absorption rates of Member States. It should be noted that the figure of 33% quoted by MEP Scicluna actually refers to the funds reimbursed by the Commission to Malta so far. Requests for payments are sent by Malta on a continuous basis and, in fact, the amount requested by Malta on the programmes to date stands at 37% with the next request expected to be sent to the Commission by year end," the government said.

The bulk of payments for projects are paid at the completion of the projects. This is a common and standard practice in line with EU rules.

"If one were to take the status of payments of the previous (2004-2006) Programme at the same time of implementation ( which would be end of 2006), the payment rate paid by the Commission stood at 30%. Malta has managed to maintain and actually improve this rate in the current period with a Programme which is 10 times larger than the previous one and which for the first time has a number of major projects which are by their very nature more complex to implement," the government said.

Malta managed to absorb all the funds under the previous period.

"The government is monitoring closely the current programme to ensure that steady progress continues to be made. One should note that NO funds have been lost and none are at risk at this stage, while payments on the Programmes can be made until the end of 2015, which can be checked and claimed by Malta even after this date."