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The scheme aimed to help integrate Ukraine's economy with those of its EU neighbors by building or modernizing checkpoints at crossings with Poland, Hungary, Slovakia and Romania.
The State Fiscal Service of Ukraine, the local tax and customs authority, says it is early to talk about the European Union's decision to shut down a border project under which six Ukrainian checkpoints had to be upgraded.
"We expect feedback at the moment. Given this, it is early and wrong to talk about the termination of the projects and the need to return [unused] funds," the service said in a comment sent to Radio Liberty's Ukrainian-language service.
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Reuters earlier reported in its exclusive material that the EU had decided to shut down a border checkpoint scheme with Ukraine, deepening doubts about Kyiv's ability to deliver reforms in return for billions in European aid.
The project to upgrade six Ukrainian checkpoints on the EU's eastern frontier was launched in 2014.
The scheme aimed to help integrate Ukraine's economy with those of its EU neighbors by building or modernizing checkpoints at crossings with Poland, Hungary, Slovakia and Romania. According to the EU, the projects were designed to cut border crossing times and improve customs procedures.
They foundered after a series of delays, missteps and cost overruns involving local officials and contractors, according to internal Ukrainian government correspondence, and correspondence between the European Commission and the Kyiv authorities provided by a source at a government body, Reuters said.
In a statement to Reuters, an EU spokesperson said: "Following our assessment we concluded that the projects could not be finalised in time. The 6 projects are now in the process of being closed, and the unspent money reimbursed."
As of the end of 2017, none of the six checkpoint projects had been completed, even though the EU was providing EUR 29.2 million ($36 million) in funding.
Roman Nasirov, a former head of the State Fiscal Service of Ukraine, who took over in May 2015, said in an interview that the checkpoints projects had been complicated by the fact that Ukraine could not at times afford the required co-financing. He made the comments to Reuters shortly before he was dismissed on January. 31 for reasons unrelated to these projects.
The biggest contract, for two of the checkpoints, was awarded to Energomontazhventiliatsia, a firm that specializes in installing ventilation units and had no track record of winning government construction tenders, according to an online registry of state contracts.
Speaking to Reuters in October, Energomontazhventiliatsia's finance director Serhiy Romanenko blamed obstructive Ukrainian and EU officials for the failure to complete the two checkpoints on the Romanian border.
The State Fiscal Service said it had not paid Energomontazhventiliatsia because it had not provided the agency with documents proving that the work had been completed.