EU could cut funds to Italy-France rail link by end of March- official

A high-speed rail link project between Italy and France could lose up to 300 million euros ($340 million) of European Union funds if tenders are not launched by the end of March, an EU official said. The project, known in Italy as TAV and meant to connect the Italian city of Turin with Lyon in France, has been delayed for months because Italy's ruling 5-Star Movement opposes it.

Brussels has repeatedly said that in the face of protracted delays it could cut funds it has already allocated to the project. Of the 813 million euros the EU has agreed to disburse for the rail connection until 2020, around 300 could be moved to other projects if new tenders were not launched in March, the EU official said.

On Thursday the Italian parliament passed a motion committing the government to "totally rediscuss" the Turin-Lyon rail project, a move seen as an attempt to postpone any definitive decision until after European parliamentary elections in May. The EU official said new tenders should be launched in March so that by the end of that month the joint French and Italian company in charge of the project, the Tunnel Euralpin Lyon Turin (TELT), could submit to Brussels a report on the works, as required by the contract with the EU.

The rail link would pass through a 36-mile (58 km) Alpine tunnel. TELT has already dug more than 15 miles (25 km), including four access tunnels and about 4 miles (6 km) of one of the two main passageways. ($1 = 0.8823 euros) (Reporting by Francesco Guarascio; Editing by Toby Chopra)