Report from the Commission to the European Parliament and the Council - Third Annual Report 2008 on the implementation of Community assistance under Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community
Date: 2009-07-08
Institutions: European Commission
Subjects: Cyprus, EU aid, aid programme, development aid, economic development, financial instrument, financing of aid

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.7.2009 
COM(2009) 286 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Third Annual Report 2008 on the implementation of Community assistance under 
Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of 
financial support for encouraging the economic development of the Turkish Cypriot 
community 

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1. 

INTRODUCTION 

Council  Regulation  (EC)  No  389/2006  establishing  an  instrument  of  financial 
support  for  encouraging  the  economic  development  of  the  Turkish  Cypriot 
community1 (hereafter the "Aid Regulation") was adopted on 27 February 2006. On 
the  basis  of  this  regulation,  €259  milli on  was  allocated  from  the  2006  Community 
budget.  

This third report covers the period from 1 January until 31 December 2008.  

2008  saw  the  start  of  UN-facilitated  talks  on  a  comprehensive  settlement  between 
two leaders of Cypriot communities. By the end of the year, 13 rounds of negotiation 
had been held.  

2. 

PROGRAMMING OF THE ASSISTANCE 

No additional resources requiring programming were made available under the 2008 
budget.  

3. 

IMPLEMENTATION MECHANISMS  

The  European  Commission  is  responsible  for  administering  the  assistance.  The 
implementation  mechanisms  were  dictated  by  the  ad  hoc  nature  of  this  aid 
programme  and  of  its  beneficiaries.  The  programme  is  implemented  in  an  EU 
Member State but in an area that is not under the effective control of that Member 
State's Government and where the application of the EU acquis is suspended..  

A Programme Team of Commission officials and contract agents was set up in 2006 
to implement the programme as part of the Task Force Turkish Cypriot community 
within  DG  Enlargement.  During  the  reporting  period,  the  Programme  Team  was 
further  strengthened.  By  December  2008  it  comprised  38  staff  including  3 
Commission  officials,  23  contract  agents  and  12  local  staff  provided  by  a  private 
contractor  (Deutsche  Gesellschaft  fur  Technische  Zusammenarbeit  -  GTZ)  for 
administrative and logistical support.  

The  Programme  Team,  working  on  long-term  mission  in  Cyprus,  continued  to  use 
the  Programme  Support  Office  established  in  September  2006,  located  in  the 
northern  part  of  Nicosia.  The  Programme  Support  Office  provides  a  venue  for 
meetings  and  seminars  with  Turkish  Cypriot  stakeholders.  It  also  allows  direct 
supervision of contractors. Due to growing staff numbers, the office moved to larger 
premises  in  June  2008.  Office  logistics  continue  to  be  provided  by  a  private 
contractor (GTZ) under a contract that runs until June 2012. The Representation of 
the Commission in Cyprus also provides a venue for meetings and seminars. 

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OJ L65, 7.3.2006, p.5. 

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2008 was the first year when the impact of the maximum three year rule for contract 
agents in the Programme Team was felt with three members of staff leaving the team 
and having to be replaced.  

4. 

IMPLEMENTATION DURING THE REPORTING PERIOD 

4.1. 

General overview  

The  Commission  implements  the  programme  in  a  unique  political,  legal  and 
diplomatic  context.  Ad  hoc  arrangements  are  needed  to  allow  the  Commission  to 
implement  the  programme  whilst  respecting  the  principles  of  sound  financial 
management.  

Generally  in  EC  funded  aid  programmes,  a  Financing  Agreement  with  the 
government of the beneficiary country establishes the legal framework under which 
the  assistance  is  implemented,  regulating  issues  such  as  taxation  and  work  and 
residence  permits.  No  such  agreement  exists  for  this  programme.  Therefore,  the 
Commission  has  to  rely  on  what  it  understands  to  be  the  rules  and  conditions 
currently  applicable  locally.  These  are  not  legally  enforceable  and  might  change 
during the lifetime of a contract. The lack of a Financing Agreement means that the 
Commission, in entering into contractual arrangement with its contractors, takes on 
potential liabilities that it would not normally encounter. Contractors might cost their 
services at a higher price to protect themselves from these uncertainties. 

Because  of  the  political  context,  enforcement  of  recovery  orders  for  amounts  to  be 
recovered  from  Turkish  Cypriot  entities  (in  case  of  non-compliance  with  terms  of 
contract)  may  be  difficult.  The  Commission  has  adopted  measures  to  mitigate  this 
risk (e.g. intensive monitoring and support, revised payment conditions). 

The  Commission  relies  on  the  support  of  the  Turkish  Cypriot  community  to  make 
this  programme  a  sustainable  success.  Turkish  Cypriot  experts  are  involved  in 
drawing up technical specifications and Terms of Reference. Turkish Cypriot experts 
are  included  in  tender  evaluation  panels.  After  contracts  are  awarded,  Turkish 
Cypriot  beneficiaries  play  a  key  role  in  Steering  Committees.  More  remains  to  be 
done to ensure long-term sustainability. 

Turkish  Cypriot  counterparts  are  identified  for  each  project.  Turkish  Cypriots  are 
becoming  familiar  with  EC  procedures,  in  particular  competitive  tendering  and 
selection procedures. As regards grant schemes, absorption capacity increased in the 
course of 2008.  

Some of the risks highlighted in the Second Annual Report 2007, in particular how 
the overall political context impacts on implementation of the aid, were encountered 
during this reporting period.  

In  the  course  of  February  and  March  2008  the  Government  of  the  Republic  of 
Cyprus    submitted  eight  cases  against  the  Commission  before  the  Court  of  First 
Instance as well as eight requests for interim  measures, arguing  that the text of the 
procurement notices used in the programme implementation could imply recognition 

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of  a  public  authority  other  than  the  government  of  the  Republic  of  Cyprus  and 
requested the annulment of all procedures based on these notices. 

 The  President  of  the  Court  of  First  Instance  rejected  the  requests  for  interim 
measures, through Orders issued on 8 and 11 April 2008. The Commission decided, 
in  order  to  avoid  any  further  contestation,  to  modify  the  standard  text  of  the 
procurement  notices.  In  May  2008  the  Government  of  the  Republic  of  Cyprus 
withdrew the applications for the main cases. These court cases caused two to three 
months delays in contracting the eight projects.  

There  were  further  delays  in  completing  the  internal  procedures  and  necessary 
negotiations for the signature of a €9 million agreement with KfW to provide SME 
financing by indirect centralised management.  

As  regards  property,  the  Commission  welcomes  the  increased  pace  of  information 
provision  by  the  Government  of  the  Republic  of  Cyprus  during  the  second  part  of 
2008.  

4.2. 

Progress by objective  

The  overall  objective  of  the  Aid  Programme  is  to  facilitate  the  reunification  of 
Cyprus  by  encouraging  the  economic  development  of  the  Turkish  Cypriot 
community  with  particular  emphasis  on  the  economic  integration  of  the  island,  on 
improving  contacts  between  the  two  communities  and  with  the  EU,  and  on 
preparation for the acquis communautaire. 

Financial assistance under the Programme focuses on five priority objectives. Out of 
the  overall  allocation  of  €259  milli on,  €240.15  million  was  allocated  to  the 
operational  part  of  the  programme.  Key  activities  and  issues  during  the  reporting 
period were as follows: 

4.2.1.  Objective 1: Developing and restructuring of infrastructure 

During  the  reporting  period,  activities  focused  on  preparation  of  the  conceptual 
design  and  tender  documents  for  the  large  works  and  supply  components  to  be 
funded  under  this  priority.  In  the  case  of  the  water/wastewater  sector,  the  design 
consultant underperformed. Considerable efforts were required from the Programme 
Team to put contract implementation back on track. 

In  the  field  of  water/wastewater,  three  works  tenders  were  launched  by  December 
2008 (including the re-launch of the tender for the replacement of asbestos pipes in 
the northern part of Nicosia2). Following the design phase, the estimated budget for 
the  realisation  of  the  water/wastewater  projects  increased  by  over  €20  million, 
mainly  due 
the  desalination  plant  at 
Kümkoy/Sirianokhori. It was initially intended to abstract and desalinate the brackish 
water from the Morphou aquifer. The approach was changed to seawater desalination 
in  order  to  prevent  further  deterioration  of  the  aquifer.  The  change  implies  a 

the  changed  approach 

for 

to 

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This first works contract was signed in February 2009 

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considerable  increase  in  costs,  which  may  have  an  impact  on  the  funding  for  other 
planned projects. 

On  nature  protection,  a  draft  training  strategy  and  awareness  raising  programme 
were developed as well as initial proposals for the management of the six potential 
Natura  2000  areas.  Two  public  meetings  were  held  for  awareness  raising -  one  for 
the  general  public  and  the  other  in  one  of  the  six3  potential  Natura  2000  areas. 
Turkish  Cypriots  took  further  actions  for  the  protection  of  these  areas  bringing  to 
four the areas covered by special protection measures.  

The preparation of studies and conceptual designs for the rehabilitation of the former 
mining and ore processing sites in the Lefke/Lefka region continued. Activities are 
aimed at identifying remediation solutions for the former mining areas, minimizing 
the impact on the environment and human health. Extensive site investigations were 
performed in 2008. 

In  the  solid  waste  sector,  the  Commission  signed  a  contract  to  prepare  surveys, 
detailed  designs  and  tender  documents  for  the  construction  and  rehabilitation  of 
several waste management facilities based on the approved solid waste management 
plan.  The  main  works  were  focused  on  detailed  investigations  and  identification  of 
locations and selection of technologies for the envisaged facilities. Also in the solid 
waste  sector,  the  2006  cost  estimates  proved  to  be  on  the  low  side.  It  will  not  be 
possible to rehabilitate all existing dumping sites through this programme. 

In  the  energy  sector,  three  activities  were  tendered  out:  for  electricity  meters,  the 
meter  calibration  and  testing  system,  and  the  reactive  energy  measurement 
programme. The initial tender was unsuccessful. A second tender led to a successful 
outcome at the end of the year. The savings realized by the competitive process will 
allow  procurement  of  additional  meters  in  2009.  A  technical  assistance  team  has 
been  contracted  to  assist  the  Commission  in  monitoring  project  implementation,  to 
provide  support  to  the  Turkish  Cypriot  electricity  utility  company  to  manage  the 
sector, and to introduce multiple tariff systems. A tender was prepared to procure a 
SCADA  system  that  allows  real-time  monitoring  and  control  of  the  electricity 
network,  with  specifications  that  ensure  compatibility  with  the  SCADA  system 
currently  in  place  in  the  government-controlled  areas.  In  the  field  of  renewable 
energy,  a  tender  was  prepared  for  a  pilot  solar  power  plant  to  provide  1  MW  of 
power output capacity. 

The  tender  for  the  main  telecommunications  project  to  upgrade  and  replace  the 
current  network  by  a  modern  internet-based,  backbone  infrastructure  was  still  on-
going at the end of the review period. Technical assistance was contracted to help the 
Turkish  Cypriot  beneficiary  manage  the  sector  according  to  EU  standards  and 
international  best  practice  and  to  conduct  a  comprehensive  training  programme  in 
view of the upgrading of the system. 

The Organizational Audit of the Road Safety Committee was finalized in July 2008. 
The  main  outcome  was  the  production  of  a  set  of  options  for  restructuring  the 
Committee  with  a  view  to  enhancing  capacity  to  face  the  challenges  of 

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Additional meetings for the other five areas were held in the first semester of 2009. 

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approximation  with  the  EU  standards  in  the  field  of  Road  Safety.  Several 
procurement tenders were launched for the improvement of the Accident Information 
System, for the improvement of vehicle inspection and of driving licence exams, for 
the improvement of traffic operational management and for the improvement of the 
primary road network. 

4.2.2.  Objective 2: Promoting social and economic development 

A Rural Development Support Team (RDST) was set up in June 2006 after four 
months  delay  due  to  legal  action  against  the  Commission  by  an  unsuccessful 
tenderer. The main task of the RDST was to help prepare a rural development plan to 
set  priorities  for  a  €5  million  grant  scheme  to  im prove  agricultural  production.  26 
pilot grant contracts were signed for over €0.5 million to improve hygiene on sheep 
and  goat  farms.  In  addition,  a  €5  million  grant  scheme  was  launched  aimed  at 
improving  living  conditions  in  rural  villages.  The  RDST  provided  extensive 
assistance  to  potential  grant  applicants.  A  dedicated  Programme  Management  Unit 
has been established to assist the Commission with the assessment of grant scheme 
applications,  as  well  as 
the  selected  beneficiaries  with  project 
implementation.  Technical  Assistance  teams  have  been  contracted  in  the  crop  and 
animal  production  sectors  to  develop  farm  extension  services  and  improve  the 
capacity of veterinary services. 

to  assist 

Two calls for proposals for schools were launched in 2008. 13 schools were awarded 
a  grant  under  the  first  call.  Commissioner  Figel  visited  one  of  these  schools  in 
December  2008.  As  part  of  their  project,  three  schools  visited  counterparts  in 
Hungary, Finland and Germany. Technical assistance was provided for the ongoing 
reform  of  the  primary  and  secondary  education  sector.  Co-operation  with  the 
European Training Foundation continued and resulted in the launch of an Education 
Development Platform in September 2008. 

To support life-long learning, social inclusion and active labour market measures, 
two calls for proposals were launched with 11 grants awarded. Upgrading of urban 
and local infrastructure is being undertaken in joint management with UNDP. Works 
on the restoration of the Bedestan building in the walled city of Nicosia continued. 
Projects  to  complete  local  infrastructure  were  completed  in  the  villages  of 
Kalevaç/Kalyvakia  and  Hisarköy/Kampyli.  Good  progress  has  been  made  on 
preparing the rehabilitation works for the Desdemona area within the walled city of 
Famagusta.  

Activities in the "Micro and small enterprise loan programme" were focused on the 
negotiation  of  a  €9  million  agreement  with  Kreditanstalt  für  Wiederaufbau  (KfW), 
following  a  positive  audit  of  the  bank’s  capacity  to  implement  activities  under  an 
indirect  centralized  management  procedure.  Sustainable  economic  development 
activities  focused  on  the  preparation,  launch  and  evaluation  of  a  €800,000  grant 
scheme for Turkish Cypriot SMEs to improve their competitiveness. The priorities of 
the scheme were on the provision of help to SMEs, to prepare for implementation of 
the acquis in case of reunification. 

The  project  Support  for  Private  Sector  Development  is  implemented  in  joint 
management  with  UNDP.  A  grant  scheme  of  some  €600,000  to  assist  Turkish 

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Cypriot small companies in developing e-commerce platforms was launched and 29 
companies were selected to benefit from this assistance. 

4.2.3.  Objective 3: Fostering reconciliation, confidence building measures, and support to 

civil society 

(1) 

(2) 

(3) 

(4) 

Reconciliation,  confidence  building  measures  and  support  to  civil  society: 
focused  primarily  at  strengthening  civil  society  organizations.  A  first  grant 
scheme  “Cypriot  Civil  Society  in  Action  I”  with  a  €2  million  budget  was 
evaluated  and  15  projects  were  selected.  A  second  grant  scheme  “Cypriot 
Civil  Society  in  Action  II”  was  launched  with  a  budget  of  €2.5  million  for 
which proposals received were still under evaluation in December 2008. The 
Civil  Society  Support  Team  (technical  assistance  team)  provided  guidance 
and  support  to  applicants.  It  implemented  a  campaign  to  raise  awareness  of 
the  role  of  civil  society  and  the  importance  of  active  citizenship.  The 
campaign was launched in the presence of Commissioner Spidla. Under this 
project,  the  EU  has  provided  €1.5  million  to  the  Committee  of  Missing 
Persons.  

Demining:  In  total,  20  out  of  the  26  agreed  minefields  were  expected  to  be 
cleared under a €4 million contract. A furthe r €5 million is needed to clear the 
buffer zone completely of mines by the end of 2010.  

History teaching project: Council of Europe delayed countersignature of a €1 
million  contract  on  history  teaching  because  of  concerns  expressed  by  the 
Republic  of  Cyprus  authorities.  The  project  was  subsequently  cancelled 
because it had become obsolete due to developments in the sector.  

Academy  of  Political  Studies:  the  project,  implemented  by  the  Council  of 
Europe,  focused  on  developing  a  common  understanding  among  young 
Cypriot leaders on key issues for the future of the island within an integrated 
Europe.  The  selected  group  of  young  leaders  from  both  sides  of  the  island 
participated in two seminars.  

4.2.4.  Objective 4: Bringing the Turkish Cypriot community closer to the European Union 

The  Scholarship  Programme  continued  for  academic  year  2008-2009.  122 
scholarships  were  granted,  up  from  30  scholarships  in  the  previous  year.  Turkish 
Cypriot  scholars  are  studying  in  the  United  Kingdom,  the  Netherlands,  France, 
Finland,  Belgium,  Germany,  Italy,  Spain,  Estonia  and  Hungary.  The  third  call  was 
also  launched  in  September  for  academic  year  2009-2010  and  the  first  information 
sessions, organized in the autumn, showed increasing interest from Turkish Cypriot 
students. 

The  first  call  for  proposals,  under  the  “Promotion  of  Youth  Exchanges  and  other 
People-to-People  Contacts”  grant  scheme,  was  launched  with  a  budget  of  €1.5 
million.  The  objective  is  to  help  Turkish  Cypriots  improve  their  understanding  of 
European  values,  experiences  and  multi-cultural  traditions.  Only  seven  project 
proposals  were  selected.  The  high  rejection  rate  of  project  proposals  shows  the 
difficulty for individuals to design projects that fit into the overall objectives of this 
action. 

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The procurement of a contractor to run the future Information Point in the northern 
part of  Nicosia  was  delayed  due  to the difficulty  in finding  suitable experts for the 
project. 

4.2.5.  Objective 5: Preparing the Turkish Cypriot community to introduce and implement 

the acquis communautaire  

This  objective  is  mainly  carried  out  through  the  European  Commission's  Technical 
Assistance  Information  Exchange  (TAIEX)  instrument.  In  2008,  TAIEX  organised 
220  activities  such  as  workshops  or  seminars  with  466  experts  from  EU  Member 
States. Assistance concentrated mainly on the preparation of the Programme for the 
Future Application of the Acquis (PFAA). The main aim of the PFAA is to provide a 
framework  for  the  identification  and  prioritisation  of  specific  areas  of  the  acquis 
communautaire  where  assistance  will  be  provided  in  preparation  for  reunification. 
The PFAA targeted 12 sectors of the acquis communautaire.  

Linked  to  the  concerns  of  the  OECD-based  Financial  Action  Task  Force  (FATF) 
about  the  vulnerability  to  money  laundering  and  terrorism  financing  in  the 
northern  part  of  Cyprus,  TAIEX  provided  assistance  concerning  international 
standards  and  their  application.  This  led  to  the  FATF  issuing  a  public  statement  in 
October  2008  stating  that  the  level  of  vulnerability  to  money  laundering  had  been 
significantly reduced. The Commission has agreed to continue to act on behalf of the 
FATF and to monitor further developments. 

In  the  environment  sector,  assistance  was  provided  to  prepare  the  mapping  and 
designation of six specially protected environmentally sensitive areas; the elaboration 
of a water strategy; the creation of an inventory of all water boreholes and wells. 

Regarding agricultural policy, continuous work on a reform strategy paper with an 
in-depth economic analysis of the agricultural sector focusing on key sectors (dairy, 
cereals, potato and citrus) as well as concrete proposals for change in the policy was 
undertaken.  

Under the project for capacity building in the environment sector, the main activities 
focused on the development of air quality monitoring and quality assurance systems. 
The  necessary  equipment  was  identified,  technical  specifications  prepared  and  the 
tender procedure launched.  

The need for improved statistical information has also been a key focus of support. 

Phytosanitary experts were recruited to supervise potato trade across the Green Line 
which tripled in 2008 compared to 2007, reaching a value of more than €2 million. 
Experts also assisted the start of trade in fish and citrus fruit. 

4.2.6.  Unallocated Technical Assistance and Programme Reserve Facility 

No use was made of this facility during the reporting period. 

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4.2.7.  Financial assistance to cover administrative expenditure under Article 4(3) of the aid 

regulation 

A total of €18.85 million (i.e. 7.2% of the overall financial allocation) was earmarked 
to  help  the  Commission  implement  the  programme.  This  covers  costs  of  staff 
involved in the implementation and costs linked to the Programme Support Office.  

4.3. 

Financial execution (contracts and payments) 

4.3.1.  Contracting  

During  the  reporting  period,  a  total  of  €37  million  was  contracted.  Of  this,  around 
€31 million was contracted under the operati onal part of the programme and around 
€5 million for supporting activities under  Article 4(3) of the Aid Regulation.  

By the end of 2008 nearly €70 million was cont racted in total (27%). Of this amount, 
around €63 million was contracted under the operational part.  

4.3.2.  Payments 

During the reporting period, the Commission disbursed a sum of around €13 million. 

By the end of 2008, the Commission had disbursed, from the programme, a total sum 
of around €26 million (10%). 

4.4.  Monitoring  

Three  meetings  of  the  Interim  Review  Mechanism  (IRM)  took  place  during  the 
reporting  period.  The  IRM  serves  as  a  forum  to  discuss  in  detail  with  the 
beneficiaries the implementation of the programme.  

4.5. 

Audit and controls 

An  internal  audit  was  carried  out  in  2008  by  DG  Enlargement  Internal  Audit 
Capability  Unit.  The  main  recommendations  focussed  on  assuring  sound  financial 
management  in  the  specific  legal  circumstances  obtaining  in  the  northern  part  of 
Cyprus. 

4.6. 

Information, Publicity and Visibility  

During the reporting period, 33 press releases were published on programme-related 
issues. A total of 23 public events were organized. The Programme Team and the EC 
Representation  used  many  opportunities  to  increase  the  programme’s  visibility, 
including  the  visit  of  European  Commissioners  in  the  northern  part  of  Cyprus. 
Information campaigns were carried out using mass media, mostly for grant schemes 
such  as  the  Scholarship  Programme.  Cooperation  with  the  EC  Representation  in 
Cyprus  for  the  dissemination  of  press  releases,  media  interviews  and  other  actions 
also  contributed  to  increase  visibility.  Awareness  about  the  Programme  among  the 
Turkish Cypriot community has increased significantly during the reporting period.  

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4.7. 

Consultations with the Government of the Republic of Cyprus 

Meetings  were  held  with  representatives  of  the  Government  of  the  Republic  of 
Cyprus, in particular when senior Commission officials visited the island. There were 
eight such visits during the reporting period. Working level meetings were also held 
with  representatives  of  line  ministries,  particularly  in  the  fields  of  environment, 
energy  and  telecommunications,  with  a  view  to  taking  into  account  island-wide 
planning aspects, where appropriate, in line with Recital 8 of the Aid Regulation. 

As for property rights, there was a significant increase in project preparation in 2008 
requiring verification of property ownership. To this end, the Commission requested 
the  support  of  the  Government  of  the  Republic  of  Cyprus  to  confirm  the  names  of 
private  owners.  Obtaining  the  private  owners'  names  is  only  the  first  step.  The 
Commission  must  then  request  and  receive  their  consent  before  signing  works 
contracts. 

5. 

CONCLUSIONS 

During the reporting period, activities focused on:  

(1) 

(2) 

Implementation:  preparing  and  revising  tender  dossiers,  calls  for  proposals 
for  grant  schemes,  works  and  services  tenders  and  contracts,  as  well  as 
supervision of the execution of contracts signed. 

Further  strengthening  of  the  Programme  Team:  to  facilitate  contracting  and 
programme implementation ten additional staff were employed. 

Some  challenges  mentioned  in  previous  reports  are  still  present.  In  the  reporting 
period issues affecting the Aid Programme implementation included: 

(1) 

(2) 

(3) 

(4) 

Cooperation between Turkish Cypriot and Greek Cypriot communities this is 
the key to the programme's success. Improved cooperation in 2008 facilitated 
programme implementation.  

Low absorption capacity by the beneficiary community: the Turkish Cypriot 
community  is  small  and  not  well-equipped  in  terms  of  structures  to  receive 
such large resources in a short time. Considerable improvement was noted in 
the course of 2008.  

Court  cases,  now  withdrawn:  caused  two  to  three  months  of  delay  in 
implementation of certain projects. 

Delays concerning property: The time required to identify owners' names and 
the  need  to  obtain  their  consent  has  to  fit  into  the  tight  implementation 
schedule.  This  issue  becomes  more  important  as  the  2009  contracting 
deadline approaches. 

(5) 

Shortage of funds: following the preparation of technical documentation and 
adjustment of projects there is a significant shortage of funds and it might not 

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be possible to finance one or more of the planned projects under the currently 
available funds.  

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