EC renews funding for transport and environment

Prague, Oct 30 (CTK) - The European Commission has renewed payments from operational programmes Environment and Transport and almost Kc43bn came to the Finance Ministry's accounts, both programmes being among the largest and at the same time most problematic in drawing of subsidies from the EU.

Ministry spokesman Ondrej Jakob told CTK that the EC had approved and paid on the ministry's applications for EUR876.4m (Kc21.7bn) from programme Environment and EUR845.8m (Kc21bn) from programme Transport.

The EC suspended the payments from these two operational programmes in June 2011 (programme Environment) and August 2011 (programme Transport).

Payments from a number of other programmes, central and regional ones, were suspended as well due to the EC's doubts about the way the Czech Republic is drawing money from the EU's funds.

The release of subsidies for some operational programmes came already in July but the first payments from programmes Transport and Environment came only now, Jakob said.

The EC proposed this year in October that it will not pay up to EUR500m (Kc12.5bn) worth of money from EU funds to the Czech Republic this year for its programmes Transport and Environment.

Prime Minister Petr Necas earlier said that the Czech Republic was not losing the money because it could be used to finance other projects.

Jakob said the same thing yesterday. "The operational programmes are losing no money from their allocation but new projects will have to be submitted so that the total amount of money be drawn," Jakob explained.

Problems with drawing of subsidies by the Czech Republic peaked in the first half of this year. The EC reproached Czech authorities in particular shortcomings in control and audit.

The Finance Ministry therefore in March stopped asking the EC for retroactive payment of the subsidies that the state is paying to the recipients first from its own budget. Audits in several subsidised programmes followed, including the two largest ones - Transport and Environment.

By these two programmes, the EC has proposed "financial corrections" equal to 5 percent from the volume of expenditures paid to the recipients by August 31, 2012 by the Operational Programme Environment and 10 percent by the Operational Programme Transport.

"The Czech Republic has accepted the financial corrections and pledged to apply them by gradually lowering the sums in the applications for the payments," Jakob said.

The total financial correction amount is Kc1.7bn by programme Environment and Kc9.5bn by programme Transport. Of this, Kc1.6bn (Environment) and Kc4.8bn (Transport) has already been deducted from the applications for payments submitted by the EU on October 18, 2012, he added.

In 2007 - 2013, the Czech Republic can gain up to Kc798.7bn (with the use of the crown's current rate) from Brussels within all its programmes. Authorities paid Kc348.3bn to recipients of subsidies between 2007 and the beginning of July 2012.

The Czech Republic is drawing subsidies from the EU by means of 26 operational programmes. Its authorities manage seventeen programmes and other programmes concern, for example, cross-border cooperation with the neighbouring countries.

Transport is the largest operational programme in the Czech Republic. The EC has earmarked EUR5.77bn (Kc147bn) for it. Programme Environment is only a bit smaller.

The Transport Ministry will ask the EU by the end of January 2013 for the payment of Kc18bn for transport projects, minister Pavel Dobes said at a press meeting yesterday.

Together with the Kc43bn paid thus far, the ministry would thus draw over 40 percent of the total amount of money from the Operational Programme Transport.

Dobes named some substitute projects for which the subsidies could be used, for example modernisation of motorway D1, the oldest and longest motorway in the Czech Republic which after completion is to connect Prague, Brno and Ostrava, and new sections of motorway D3 which will lead from Prague to Ceske Budejovice and the Austrian border.

Like the other projects, these constructions have to be completed by 2015 for the subsidies to be paid. Dobes still believes that the entire sum of Kc147bn will be drawn from the Operational Programme Transport and that the Czech Republic will not have to return any money to the EU.