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09/12/2016

EU launches fraud probe into Lyon-Turin rail link

Transport

EU launches fraud probe into Lyon-Turin rail link

The planned high-speed rail line will connect Lyon and Turin.

[8Uhr/Flickr]

The controversial high-speed train line between Lyon and Turin is to be examined by the European Anti-Fraud Office, OLAF, amid huge cost overruns and allegations of mafia links in Italy. The EU has already contributed €450 million to the project, but France and Italy will claim a further €4 billion of EU funding. EurActiv France reports.

OLAF has confirmed to EurActiv.fr that it had opened an investigation into the costly rail link between Italy and France, following a request from French Green MEPs Karima Delli and Michèle Rivasi last December.

“After an initial analysis of the accusations we received, we have opened an investigation into the high-speed rail project between Lyon and Turin,” OLAF said.

Alleged mafia links

The investigation will examine whether fraudulent or irregular activities have taken place, and whether this may have affected the European Union’s finances.

Among the irregularities the MEPs brought to OLAF’s attention are the alleged mafia links of two of the participating Italian companies and the cost overruns on purchases of IT equipment by the Italians.

In France, the President of Lyon Turin Ferroviaire, Hubert Du Mesnil, faces accusations of a conflict of interests.

>> Read: Lyon-Turin rail link: it’s up to the states (in French)

“The seriousness of the evidence collected convinced OLAF to investigate this project, a beneficiary of European co-financing. The opening of the investigation is proof in itself that this is not just a question of allegations, but of proven cases of fraud, carried out to the detriment of the EU,” said Michèle Rivasi, Karima Delli and Daniel Ibanez, the author of a book on the rail project.

A great expense for the EU

The EU agreed to provide 40% of the planned €8.5 billion (€3.4 billion) for the construction of a 57km tunnel between Italy and France, through the Interconnection Mechanism.

“Trans-European projects have been a strategic disaster for the European Union. The EU thinks these big projects are the only way to bring about a transport union,” said the Italian co-president of the European Green party, Monica Frasoni. She warned that the Lyon-Turin line could use up a large amount of EU investment “to the detriment of other projects”.

The European Interconnection Mechanism (EIM) has a total budget of €23.3 billion for the development of transport infrastructure in the EU from 2014-2020. Just co-financing the Lyon-Turin tunnel would cost 15% of the EIM’s total budget.

The announcement of the investigation comes just before the target date for funding applications to the EIM. France and Italy have until 26 February to deliver their bids to the Commission.

“Irresponsible” project

European spending on the project has already begun. Karmia Delli said, “We have challenged the European Commission on the Lyon-Turin project, for which it has provided 50% of the funding. In total, the European Union has already spent €450 million on studies that we contest for their lack of independence”.

According to the Greens and many other opponents of the project, even its necessity is doubtful, considering the infrastructure links that already exist between the two cities. The MEPs said, “it is irresponsible to spend over €26 billion on this project, when the same goal could be reached using the existing, under-used line”.

Background

The European interconnection mechanism has a budget of €23.2 billion for 2014-2020.

This is allocated to implement transport networks projects that benefit multiple member states, particularly cross-border projects.

The project to link Lyon and Turin by rail has been an EU priority since 1994. When completed, the line will greatly increase freight capacity, and passengers will be able to travel between the two cities in two hours.

But the estimated costs keep rising. The French Court of Auditors estimates the total cost of the project to have risen from €12 billion in 2002 to €26.1 billion in 2012.