WRITTEN QUESTION E-3623/02

by Helmut Kuhne (PSE) to the Commission

(16 December 2002)

Subject: Alleged misuse of EU funds in Portugal

A letter from an EU citizen has drawn my attention to a case in which EU funds have allegedly been misused. The case involves the Quinta da Marínha Golf Resort in Cascais, which was allegedly operated by a firm called Six-Investimentos Turisticos SA.

According to my correspondent, that firm unjustifiably received funds from the EU with which, inter alia, to finance the construction of a gigantic hotel. In this connection, it is also alleged that the firm failed to comply with the provisions which must apply when EU funds are being used with regard to the training of the Quinta Da Marínha staff.

Finally, the firm is also accused of having pursued a policy of concluding consecutive six-monthly or yearly contracts with the staff and/or the practice of concluding subsequent contracts using the name of a different firm so that, in the event of a staff member being made redundant, the firm would not be liable for any financial compensation, as would be the case if an employee of the firm had been employed for more than one year.

Can the Commission confirm that appropriations from the structural funds were indeed allocated to this project and/or to this firm?

If so, can the Commission indicate the criteria on which the local authorities assessed the project as being eligible for aid and whether it agrees with them?

With regard to the accusations of circumvention of worker's rights, does the Commission have any means at its disposal with which it might directly or indirectly penalise such conduct by undertakings?

Answer given by Mr Barnier on behalf of the Commission

(4 February 2003)

The Honourable Member's question refers to possible irregularities concerning a project for investment in tourism in Portugal, part-financed by the Structural Funds.

The assistance granted to the project in question fell under an aid scheme approved by the Commission (SIFIT Tourism support system). It constituted operational assistance under the Community support framework II for Portugal: Operational programme for the modernisation of the economic fabric. In accordance with the principle of subsidiarity, the Portuguese authorities themselves select the projects to be part-financed.

The Portuguese authorities have provided the Commission with the following information:

- the project in question concerns the construction of a four-star hotel at Quinta da Marínha in the Lisbon/Cascais region;

- the beneficiary of the assistance is the company Guia Sociedade de Construções e Turismo. Under the contract signed on 31 March 1999 between L'Instituto para o Fundo de Turismo and the company, assistance was provided in the form of a repayable grant of EUR 1 999 191,59 towards a total investment of EUR 15 350 141,15;

- the Portuguese authorities ascertained that the project had been completed during an on-the-spot check on 10 April 2000.

Projects financed by the Structural Funds must comply with Community legislation.

Compliance with legislation on workers' rights is a matter for the Portuguese authorities or the competent jurisdiction in Portugal.