Four suspects arrested on suspicion of embezzling EU funds as part of a project to build a waste sorting plant outside the northern Adriatic city of Rijeka have been released from 30-day investigative custody after all 18 witnesses were heard, the Zagreb County Court confirmed on Wednesday.

The former head of the City of Rijeka Department for Utilities, Irena Milicevic, the former director of the Cistoca Rijeka city sanitation company, Jasna Kukuljan, business adviser Eddy Ropac and Cakovec-based businessman Darko Zagar were released from the Remetinec detention centre in Zagreb last Friday.

The four suspects were remanded to custody after the European Public Prosecutor’s Office (EPPO) opened an investigation into them.

The fifth suspect in the case is 80-year-old Medjimurje businessman Djuro Horvat. The EPPO did not request pretrial detention for him because of his age and poor health.

The EPPO said it was probing possible abuse of office and authority related to public procurement procedures for the construction of a waste sorting plant in Mihaceva Draga, near Rijeka.

The suspects allegedly made sure that Horvat’s Tehnix company was chosen to build the waste sorting plant at an unreasonably inflated price.

The value of the project was €3.6 million, co-funded by the European Union’s Cohesion Fund, at a rate of 85% of eligible costs.

“The officials under investigation initiated two calls for proposals for the development of the project documentation required for the construction project of the waste-sorting plant. Both calls for proposals are believed to have been organised in order to favour a company previously chosen, giving the appearance that it presented the most favourable bid,” the EPPO said.

“After the conclusion of the contracts for the development of the project documentation, the officials under investigation allowed the chosen company to design part of the documentation pertaining to the construction of the sorting plant, and to set the prices for all works necessary, to establish the estimated price of the planned public procurement.”

In this way, the company under investigation was given a privileged position, compared to other interested economic operators, and the price of all the works was unreasonably inflated by at least €506,000, the EPPO said.