WRITTEN QUESTION E-3613/02

by Paulo Casaca (PSE) to the Commission

(16 December 2002)

Subject: Reduction in Cohesion Fund appropriations for Portugal

Since the tabling of question E-3514/02 by the author of the present question, on a possible reduction in Cohesion Fund appropriations for Portugal, the newspaper Público has confirmed that the Commission has decided to suspend budgetary authorisation for the financing from the Cohesion Fund of projects for water supply and treatment of waste water in Portugal.

While it is not the author's intention to impose an opinion on the legal disagreements between the Commission's internal market services and the Portuguese state, the Commission is nonetheless asked to answer the following questions:

1. Does the Commission believe that it is fair, reasonable and proportionate to deprive a Member State which is a beneficiary of the Cohesion Fund of several hundred million euros on the grounds of uncertainties relating to procedures which have been in place, quite uncontested, for almost a decade, while flagrant, open and repeated breaches of Community law by other Member States go completely unpunished provided they do not refer to measures involving Community funds?

2. Has the Commission examined the consequences of its decisions as regards compliance with the EU's environmental objectives and the Portuguese state's ability to meet them?

3. Does the Commission not consider it possible that new circumstances, a new conceptual approach or a new reading of the facts could make it perfectly desirable for it to formulate a properly grounded position for the future, without, however, calling into question actions carried out in all good faith in the past?

Joint answerto Written Questions E-3514/02 and E-3613/02given by Mr Barnier on behalf of the Commission

(4 February 2003)

The indicative ceilings on Cohesion Fund resources for each country apply to the entire period 2000-2006, not year by year. In 2002, the four cohesion Member States absorbed all the appropriations entered for the Cohesion Fund in that year's budget. Appropriations committed for Portugal amounted to EUR 297 million, which is considerably below the amount corresponding to the average of the indicative range for the financial year. The shortage of Portuguese projects was offset by adopting extra projects in other Member States. It is very important to ensure that enough projects suitable for adoption are presented in 2003, since otherwise it will be difficult to avoid losing the appropriations entered in the 2003 budget for the Cohesion Fund, as other Member States can hardly be expected to take up the slack once again.

On 23 October 2002, the Commission sent the Portuguese Government a letter of formal notice of failure to comply with the provisions of the EC Treaty on public procurement, relating to the granting of concessions to firms controlled by Águas de Portugal SA, in the framework of implementation of multi-municipal waste disposal and water distribution systems.

Pursuant to Council Regulation (EC) No 1164/94 of 16 May 1994 establishing a Cohesion Fund(1), projects financed by the Fund must be in keeping with Community policies concerning the award of public contracts. The Commission cannot contribute, even indirectly, to the implementation of national measures liable to be in breach of Community law. Consequently, it cannot adopt any further Cohesion Fund grant decisions for projects involving companies controlled by Águas de Portugal SA. Approval of further grant decisions for such projects will be possible only once the infringement has ceased.

The Commission and Portugal have agreed to a reference framework setting out priority investment in environmental projects to be part-financed by the Cohesion Fund.

These priority investment projects include some to be carried out by companies controlled by Águas de Portugal SA. They will be approved subject to compliance with Community legislation.

For the time being, the Commission has not suspended payments on projects already adopted.

The Commission shares the Honourable Member's concerns, and understands his arguments. It hopes that a solution can be found which will enable the planned investment to be carried out in strict compliance with Community law.

(1) OJ L 130, 25.5.1994.