WRITTEN QUESTION P-2821/00

by Cecilia Malmström (ELDR) to the Commission

(4 September 2000)

Subject: Belated conclusion of contract for aid funding

For a number of years the Swedish Afghanistan Committee has received support from the Commission to enable it to carry out aid work in Afghanistan. In 1999, at the request of the Commission, aid organisations from a number of Member States formed a consortium with a view to applying for fresh funds for aid to Afghanistan. The organisation which concluded a contract with GD Yttre Förbindelser for this purpose was the Danish Dacaar.

The consortium, whose application was approved on 16 November 1999, received a promise that a contract worth 17,6 million would be concluded before the end of 1999. For reasons which remain unclear, the Commission did not succeed in signing the contract before the end of the year. This in turn meant that, for auditing reasons, the contract could not be concluded before 17 March 2000.

The project which had already been approved by the Commission runs from 1 January 2000 to 31 December 2001. As GD Yttre Förbindelser's rules do not allow expenditure to be charged retrospectively, the delayed action by the Commission made it impossible for the Swedish Afghanistan Committee and its consortium to obtain reimbursement of the expenditure incurred on the project between 1 January and 17 March 2000. Consequently, the Swedish Afghanistan Committee has been compelled to cut its total aid budget, since two and a half months' expenditure could not be refunded.

I consider that the Commission ought to shoulder its responsibility for delays which occur in its administration. Naturally the consortium, whose members include Dacaar and the Swedish Afghanistan Committee, should therefore be compensated for the expenditure incurred during the part of the project which preceded the signature of the contract. Because of the Commission's action, the results of the EU-funded aid will be inferior to what was planned. Moreover, the delays within the Commission are likely to damage confidence among cooperation partners and aid recipients. What will the Commission do with regard to the above matter and in general in order to improve its administration of aid funding for GD Yttre Förbindelser?

Answer given by Mr Patten on behalf of the Commission

(5 October 2000)

The contract AFG/B7-3020/IB/1990/0282 between the Commission and Dacaar was signed by the parties on 17 and 21 March respectively and is financed under the budget heading for aid for uprooted people in Asian and Latin American developing countries (Council Regulation (EC) No 443/97 of 3 March 1997 on operations to aid uprooted people in Asian and Latin American developing countries)(1). The contract worth 17,6 million over a 28 month period consists of five subprojects implemented by non-governmental organisations (NGOs) Dacaar, the Swedish Committee for Afghanistan, Afghanaid, Healthnet International and German Agro Action.

The Management Committee on the developing countries of Asia and Latin America (PC-ALA) approved the Commission's financing proposal at its meeting on 18 November 1999. The Commission took its financing decision on 13 December 1999(2), which made it difficult or even impossible to sign the contract before the end of the year, the date on which Regulation (EC) No 443/97 expired.

At the beginning of 2000 the Commission had to determine the validity of grant contracts signed after the legal basis had expired. It reached an agreement in February, which made it possible for the majority of the contracts financed under the 1999 budget to be signed.

While the Commission is aware of the possible impact on the ground of delays in signing contracts, it is not authorised by the financial regulations to grant aid retrospectively (Article 2(2) of the specific terms of the contract states that the project begins from the date of the last signature of one or other of the parties). In this particular case the delay is mainly due to a question linked to the expiry of the basic Regulation.

Measures on the reform of external aid management are proposed in the Communication of 16 May in order to streamline internal procedures, thus making it easier to approve project proposals more quickly.

(1) OJ L 68, 8.3.1997.

(2) SEC(1999) 2121.