Vastus pöördumisele

European Commission No [email protected] regio.d.4(2023)7205 279/ST/eo Our ref. 28.09.2023 No 9.2-2/6115-1 Follow-up of the Acceptance of the Annual Implementation Report 2022 Dear Mr Slawomir Tokarski, Dear Mr Andreas von Busch, Dear Mr Daniel Woehl, Thank you for the observations concerning issues, which affect the implementation of the programme. We can assure you that the end of the period is an important issue at the level of the Estonian government. In 2023, we have carried out several reviews in the Cabinet and set internal milestones for the successful ending of the period. In August 2023, the Minister of Finance met with sectoral ministers, where the most critical measures and problems were addressed. We will continue with reviews in the Cabinet hopefully monthly and until to the end of this year. Close cooperation with sectoral ministries continues as well, we meet regularly, and Ministry of Finance composes monthly progress overviews. A more detailed information about the priority axes referred in your acceptance letter can be found in Annex 1 If you require any further information, please do not hesitate to contact us. Yours sincerely, (signed digitally) Triin Tomingas Head of Foreign Funds Unit State Budget Department /*Encl. Annex I Kairi Nisamedtinov +372 58851374 [email protected] Suur-Ameerika 1 / 10122 Tallinn / Estonia / +372 611 3558 / [email protected] www.rahandusministeerium.ee / Reg. code: 70000272  Annex 1 Updated information on progress and measures taken 1) Priority axis 7 – Water protection (CF), Financial indicator at 53.5%; As of 31.12.2022, in priority axis 7 financial indicator in Performance Framework (PF) was underachieved (54%) due to the fact that as the result of the audit carried out by the Audit Authority in the Environmental Investment Centre (EIC) in 2022, the management and control systems of EIC were assessed as Category 3. The payments by the European Commission were suspended and the expenditure had to be reimbursed retrospectively. Consequently, the achievement rate of the financial indicator in priority axis 7 dropped significantly in 2022. In 2023, the follow-up audit was carried out and approved by the Audit Authority on 25.08.2023. According to the new assessment, the EIC’s management and control systems correspond to Category 2. Although some follow-up activities (i.e. procurement irregularities identified), are still ongoing1, this does not affect the assessment of the category. It enables to release EIC’s costs and only keep on hold the projects that required follow-up activities. With the payment claim submitted to the European Commission in September 2023, Estonia is declaring expenditure in priority axis 7 in total amount of 204 891 554 euros. As a result, the achievement rate of financial indicator in PF will rise to 97%: Priority Axes Fund Financial Total % Total % indicator target expenditure expenditure for 2023 31.12.2022 31.08.2023 2014-2020.7 CF 211 788 065 113 394 673 53,5% 204 891 554 96,7% Water protection Under PA 7 “Water protection” there are still 80 projects ongoing and will be completed in the coming months. The share of payments is still increasing and the financial indicator is expected to be achieved by 100% or more. 2) Priority axis 9 – Sustainable urban development (ERDF), common indicator (CO38) “Public urban space created or rehabilitated in urban areas (m²)” at 56%; As of September 2023, the construction works are physically completed in 7 projects that contribute to the PF indicator “Public urban space created or rehabilitated in urban areas”. In these 7 projects a total of 168 616 m2 public urban space is created or rehabilitated in Ida-Viru urban areas and the output indicator is achieved by 99%. 1 The deadline to solve them is 90 days from the approvement of final audit report, which would be the end of November 2023. The list of projects contributing to the indicator and the achieved value is presented in the table below: Achieved End of Indicator (measurement Target Project name value project unit) value (Sept 2023) Construction of a multifunctional Public urban space performance and sports ground of created or rehabilitated in Jõhvi Education Campus and II stage of urban areas (m2) extension of the city centre promenade 31.12.2023 43 650 43 650 Extension of Jõhvi city centre Public urban space promenade and light traffic road to created or rehabilitated in Ahtme border, I stage 30.06.2020 urban areas (m2) 23 500 21 500 Revitalisation of the underused area of Public urban space Kohtla-Järve district through education created or rehabilitated in and the development of a leisure urban areas (m2) campus 31.08.2023 25 912 25 912 Public urban space Reconstruction of Narva-Jõesuu City created or rehabilitated in Harbour 31.05.2019 urban areas (m2) 18 100 18 100 Public urban space Reconstruction of Narva Town Hall created or rehabilitated in Building and Square 31.12.2023 urban areas (m2) 3 904 3 904 Public urban space Construction of Narva Stockholm site, created or rehabilitated in Phase I 31.12.2023 urban areas (m2) 3 250 0 Public urban space Reconstruction of the Pimeaia Park, created or rehabilitated in Phase II 31.01.2022 urban areas (m2) 18 000 18 000 Public urban space Construction of a break-through and created or rehabilitated in related infrastructure on the Puru Road 1.06.2018 urban areas (m2) 37 550 37 550 Total achieved value: 168 616 Construction works are still ongoing in Narva Stockholm site. This is a critical project as it is not sure that it will be completed by the end of the year. There might be some works that will remain to be finished next year. If this should be the case, the project will remain non-functioning, and its outputs will be reported later. We are monitoring the progress of the project very closely. However, its impact to the achievement of the target in the PF is minimal. By the end of 2023 we expect only one indicator in PA 9 that will remain under 75% (“Number of projects developing the public transport network and mobility of the entire urban area, and promoting innovative NMV traffic”), all other indicators will be achieved above 85% of the target value. We see no risk of serious failure in any of the priorities. 3) Priority axis 15 and 17 (REACT-EU ERDF), at 47.8% and 59.9%, respectively PA15: Implementing projects is a huge challenge. Every month, the Ministry of Social Affairs provides an overview of the progress of ERDF projects. In the PA15, there are several hospital projects where construction is very critical in time, but all beneficiaries are aware that the deadline for completion of the projects is December 2023. PA17: We do not see any risks using technical assistance. Only 1228 EUR of the budget is not committed. The payments made to final recipients as of September 2023 in PA15 and PA17 Priority Axes Fund Union Disbursements % Disbursements % support (OP) 31.12.2022 21.09.2023 2014-2020.17 TA ERDFREACT- 3 700 000 2 215 293 60% 2 935 831 79% EU 2014-2020.15 ERDFREACT- 186 462 364 81 178 257 44% 128 093 027 69% Fighting COVID-19 EU crisis