TROUBLED EUROPEAN GRANTS: Cancelled SAPARD and PNDR contracts

• Hundreds of projects financed through the SAPARD and the National Rural Development Program, cancelled because they were not bankable

• State secretary Barna Tanczos: "The measure needs to be rather drastic, even if it is painful"

Hundreds of contracts financed via the SAPARD and the PNDR (National Rural Development Program) were cancelled by the Ministry of Agriculture and its subordinated institutions, one of the reasons being that the beneficiaries were deemed unbankable.

One out of eight projects financed via SAPARD are in this situation. 594 contracts financed via SAPARD out of a total of 4953 were cancelled, according to a document issued by the Ministry of Agriculture, which was remitted to our editors upon request.

Apart from the 594 contracts that were cancelled under the SAPARD program, another 230 contracts which were part of the PNDR (National Rural Development Program) program, according to the quoted source.

Barna Tanczos: "Starting in 2011 we will restrict the signing of addendums"

"I still believe that the measure needs to be drastic enough, even though it is rather painful", said Barna Tanczos, secretary of state in the Ministry of Agriculture.

He explained: \"The review of these contract cancellations on a case-by-case basis requires more time than we expected, but in order to avoid the continuation of this phenomenon, starting in 2011, we will cease the signing of addendums simply on the basis of justifications and requests coming from the beneficiaries. We will also enforce clear rules for the approval of the signing of addendums which extend the implementation period\".

In the ministry I have proposed the signing of a single addendum for the extension of the acquisition procedure deadline. In case there are any contestations, and if the acquisition procedure won"t be going as planned, it is natural that we would agree once again to extend the deadline once, and to extend it again for the implementation".

• Cancellations continue

The cancellation of non-bankable contracts comes as, at the end of October, prime-minister Emil Boc gave the Ministry of Agriculture a deadline of 30 days to review all the projects financed using European grants.

"The review is ongoing, we can"t decide one day < < That"s it, we"re done and starting tomorrow there won"t be any cancellations > >", Barna Tanczos said. "I couldn"t really say that over the past two months, we have been canceling contracts at a faster rate than usual. What we can surely do is to make sure that in the future we don"t sign addendums willy-nilly \".

The review requested by the Prime-Minister was intended to cancel non-bankable contracts and release the funds to make them available to eligible projects which are found on the waiting list.

When the review was announced, state secretary Barna Tanczos claimed that approximately 40% of the contracts financed under the PNDR, signed between 2008 and 2010, which amounted to hundreds of millions of Euros, had bankability problems, and should be cancelled.

According to Tanczos, the cancellation of non-bankable projects financed under the National Rural Development Program is necessary, as "we have signed financing contracts worth 3.5 billion Euros, but less than 1 billion Euros have been paid out, and this is further proof that even though there are nice projects that look good on paper, the beneficiaries have failed to secure funding".