Bulgarian State Fund Agriculture Boss Says He Is “Attacked” for Imposing Reference Rates, but they Were Imposed by His Predecessor

In a series of public appearances the Chief of State Fund Agriculture (SFA), Rumen Porozhanov, imagined an attack against himself by publications in Bivol and other media and the activities of the National Security Agency for raiding the Fund and seizing documents.

According to him, his troubles were due to “imposition of reference prices, which are quite a restrictive element that is now applied under the new program” (interview in 24 Hours daily). He also explains the public tenders for SFA evaluators that were suspended after the publication of Bivol with reference prices: “For the new program, we have a requirement to make a reference base for different types of works on various construction sites.”

The reference prices represent a database of prices submitted by suppliers. These prices apply to projects of beneficiaries and the funding is paid to the extent of these prices in accordance with Art. 32, para. 9 of Ordinance № 9 from March 21, 2015 for the implementation of sub-measure 4.1 “Investments in agricultural holdings” from measure 4 “Investments in tangible assets” of the Programme for Rural Development 2014 – 2020

However, these reference prices are not appearing for the first time in the new program and have not been imposed by Porozhanov, but by his predecessor, Kalina Ilieva, back in 2009. (Ilieva was dismissed after a scandal with her university diploma from Germany that was proven to be forged – editor’s note) On November 25, 2009, she has invited manufacturers to a meeting to conclude an agreement precisely for determining the market value of the assets subject to applications for support (see here).

The assets without reference price are estimated on the basis of three presented offers, and the offer with the lowest price is accepted. This vicious practice has long been known to the European Commission as it is extremely easy to make an agreement between three parties to inflate prices in their bids so that a symbolic lower price can win.

Bivol attempted several times to interview Rumen Porozhanov to ask questions about corruption practices established in a series of investigations. SFA systematically refused the interview requests and invited us to send written questions, but we received only formulaic responses to these written questions.

Following the publication of our investigation in the unexplained wealth of senior SFA official Yanaki Chervenyakov, he was dismissed, while a media cohort engaged in “whitewashing” the image of Rumen Porozhanov. The systemic issues about which Bivol has been writing for more than six months are neglected and Porozhanov’s leitmotif in his lengthy interviews involves hints that he is subject to pressure from affected business interests. Porozhanov’s protection is obviously an important task for the government, as evidenced by the statements of the Finance Minister and Prime Minister Borisov that there was no scandal in SFA.

At the same time, no one is raising at all the question of non-transparent spending of funds under the “Programme for Rural Development”, which is not included in the 2020 management information system (MIS) where the process of application and absorption of EU funds can be monitored in real time.

According to Art. 32, para. 10 of Ordinance № 9, the list of reference prices is to be published no later than the date of publication of the order to determine the corresponding period of acceptance of applications for support. And those that do not want to apply for equipment in this list can simply apply for equipment outside this list.




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