ECONOMY

State brushes off criticism of Brussels-aided projects

The government yesterday sought to deflect criticism from the European Commission that certain projects funded by the second tranche of community funds were not backed by proper research and that this, together with alleged functional problems, could induce Brussels to cut off funds. In letters to Prime Minister Costas Simitis and Economy Minister Nikos Christodoulakis, Michel Barnier, regional policy commissioner, was reported to have expressed concern about the lack of proper studies in projects under the Second Community Support Framework (CSF II) which ran between 1994 and 1999. He also called attention to the timescale for the projects and questioned whether they were being implemented on time and in accordance with regulations. The commissioner singled out three railway projects being carried out by Ergose, the construction subsidiary of the Hellenic Railways Organization. The Greek government received Barnier’s comments on April 18. Greece has learned from the mistakes of the past and has improved operational procedures for community funded-projects, Simitis stressed yesterday. He said the government has taken steps to cut down on cost overruns and to improve the quality of the projects. Referring to the three railroad ventures brought up by Barnier, Simitis said the projects had been launched before the procedural changes were made. Notwithstanding this, the EU itself has confirmed that there have been no inaccurate reports on projects supported by community funds after 1997, he said. Simitis warned that a decision by Brussels to withhold funds could impinge on Greece’s ability to meet its fiscal commitments as outlined in the Stability and Growth Pact. Greece stands in no danger of losing community funds, Christodoulakis said, as it has already secured 92 percent of the allotment for CSF II and will acquire the remainder, estimated at 1.47 billion euros, by the end of the year when the projects were to have been completed. Christos Pachtas, deputy economy minister, said only a minor number of undertakings have reported cost overruns, valued at about 59 million euros, and will be covered by the State. Unlike the CSF I, the second tranche of community funds has been marked by the narrowing gap between the initial costs of a project and its final estimate, he said. Pachtas sought to downplay the comments by Barnier, noting that the letters were «a mere procedure and absolutely justified.» He said that CSF III, running between 2000 and 2008, operates to stricter guidelines, with projects expected to be executed within their budgets and supervisory bodies constantly monitoring the progress.