Infrastructure projects already contracted under the European Union Phare pre-accession aid programme could be kept going with Budget funds, Bulgaria's Regional Development Minister Assen Gagaouzov said on November 29.

Bulgaria irretrievably lost 220 million euro in Phare funds, which had not been contracted yet, after the European Commission decided not to lift the suspended accreditation of two Government agencies in charge of handling the funds - the Phare executive agency of the Regional Development and Public Works Ministry and the Central finance and contracts unit of the Finance Ministry.

The EC is to decide at a later date whether to freeze funding to already contracted projects financed under Phare, for which 340 million euro have been allocated. These are the projects that the Government could finance with either Budget funds or use EU structural funds, Gagaouzov said.

Gagaouzov said he was at a loss how the EC decision came about, claiming that EU auditors were very encouraging during their visits to the country, prompting the Cabinet to believe that the accreditation of the two agencies would be restored.

"I want to see detailed information telling us where and what we were doing wrong," he told reporters at a ceremonial turning of the first sod on an water mains project in Plovdiv, Bulgaria's second-largest city.

The EC suspended the accreditation of the two agencies in July, saying that Bulgaria's administrative capacity was weak and that there were strong suspictions of fraud and conflict of interest in awarding the funds. Furthermore, the EC said at the time, there appeared to be no political will to eradicate fraud, while the lack of tangible results in the fight against corruption was causing serious concerns.