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Financing requests grow under pressure of close accession to EU

Marţi, 20 iunie 2006, 0:00

Head of SAPARD Agency

The president of the SAPARD Agency Samoila Szabo stated for that 200 million Euros from EU funds were still available for agriculture projects. Szabo explained that the funds’ absorption was a problem for the other EU member states as well. However, it is difficult for Romania to spend all 1.4 billion Euros granted for the development of rural areas. The SAPARD program took off with delay and was carried out with difficulties. What is the situation now?

S.Szabo: The situation has to be analyzed from two perspectives - the projects’ submission and the funds granting. The number of projects increased and the funds left - 200 mln Euros - will be granted in the coming four months. The contracting rhythm improved.

As far as payments are concerned, the funds are granted for projects submitted a year and more than a year ago. We estimate a payments maximum in 2007. And still there were delays. What was the cause?

S.Szabo: Until 2005 there were no projects submitted. They started to come in the second half of last year. The programme started with a two-year delay. Officilay, SPARD should have start running in 2000, but the first project was submitted in August 2002 due to issues regarding the authorization of the Agency.

The local authorities accessed the program more easily, but private initiatives were rare as there were tough conditions regarding the necessary 50% co-financing and also a 5-20% reserve to avoid delays in implementation. How easy is it for a person to get a SAPARD financing for a project?

S.Szabo: In general lines, the process starts with the project being submitted to a regional office where a first check occurs, in the presence of the beneficiary.
If the project passes this test it is considered as complying with SAPARD requirements. Then, it follows a second field check which, if passed, makes the project eligible for the funds.
The third phase consists of the announcement that the beneficiary is given the requested sum. Following this, the person can start the implementation of the project with research for equipment, services and workings.

Once the research is done, its findings are submitted to the Agency and the contract is signed. It seems a complicated process. How long does it take?

S.Szabo: From the submission to the announcement it lasts approximately 6 weeks. After the announcement it rests with the beneficiary to handle the project who is given three months to set the purchase budget. He can ask for a prolongation of this period if well justified. Still, there are delays in the payments.

S.Szabo: Indeed, we had some problems but we managed to make more flexible the payments system. Now we pay 50% of the project’s value, 55% for farmers under 40 years, 65% for young farmers in mountainous areas, and 75% if in disadvantaged areas. Recently, a European official warned that if the contracting rhythm was not improved Romania might risk to fail absorbing in time hundreds of million Euros.

S.Szabo: For me it is of a greater importance the number of the projects approved, in the beginning phase of implementation. This is the real number that characterizes the situation which increased in the last year 3-4 folds. I estimate that we will grant funds just until August-September this year. What is the picture in terms of private and public initiatives ?

S.Szabo: As the program entailed, it was supposed to grant 40% of the funds to public works and the rest to private initiatives. Out of 1.4 bln Euros, 500 mln went to public projects. Currently, the situation shoes that half the money goes to private projects and half for public projects. 160 million Euros was allocated for the rebuilding of the areas affected by natural disasters.

The only public projects on the funding list are 16 vet labs. What are the fields most financed?

S.Szabo: Milk and meat processing, rural tourism outnumber other fields. In terms of the projects’ value, we have small project valued at 10,000 Euros, but also significant ones of 4 million Euros. What are the problems that SAPARD faces?

S.Szabo: The public projects had problems with the quality of the workings, hence we cut money. The private projects entail better quality but tend to overestimate the prices. What are the debts of the Agency?

S.Szabo: Around 3% of the funds within this program. It is a small debt. For how long will SAPARD last?

S.Szabo: It ends in 2006, but the projects submitted this year benefit a two-year implementation period. Practically, it will end in 2008. We now have funds of 200 million Euros. The rest are projects in progress. How has the project evolved in other countries?

S.Szabo: Almost everywhere, the program recorded a fast development towards the end of it and the absorption was not integral, in some countries it reached only 70%.

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