Company Suspected of Ties with Cosa Nostra Wants to Build TurkStream 2 in Bulgaria

Nikolay Marchenko

A consortium led by a construction company associated with the legendary Italian Mafia Cosa Nostra has submitted a bid for the Bulgarian section of the TurkStream 2 gas pipeline, Bivol has learned. This is Bonatti Group S.p.a., which participated in the procedures for the opening of the bids for the design, supply, construction and commissioning of the pipeline on March 7 and March 26, 2019.

According to a report by the global network BankWatch, in Italy, three of the companies hired by the Trans Adriatic Pipeline (TAP) to lay the pipelines or their subcontractors have had links with mafia groups in the past. One of them is Bonatti. Investigative journalists of Bivol’s partner, Investigative Reporting Project Italy (IRPI) confirmed this information.

Foreign contractors are in a race for the project

The Bulgarian State-owned Bulgartransgaz (BTG) announced the procedure in December 2018. The public tender for the 484 km pipeline line is worth BGN 2.286 billion, excluding VAT. A separate tender will be announced for the compressor stations on the route from the Turkish-Bulgarian to the Bulgarian-Serbian border.

Together with the Italian, two more consortia participated in the procedure. Following the reopening of the tenders, the Hungarian consortium between Industries Fovallalkozo Zrt and Industries-KVV Kivitelezo Zrt dropped out of the race over missing documentation.

DZZD Consortium Gas Development and Expansion in Bulgaria, comprising Italy’s Consorzio Varna 1 (established by Bonatti Group with headquarters in Parma, Emilia-Romagna Italy, Via “Alfredo Bernhard Nobel” 2/A 43122. and MAX STREICHER S.p.A.) and the Bulgarian branch of Luxembourg-registered Completions Development was ranked second.
Saudi Arabia’s Arkad Engineering and Construction Company and Italy-registered Arkad ABB is also a finalist. In the Bulgarian Trade Register, there is no information about the participants at this stage, at least with the names announced in the BTC’s press releases.

The address of Consortium Arkad is Saudi Commission for Health Specialties Building, 4th – 7th floors King Saud Road-Rakah, Al-Khobar 31952, Saudi Arabia. So far, none of the big Bulgarian companies in the construction industry has submitted an offer for Gazprom’s mega-project in Bulgaria.

On March 14, 2019, a protocol from the work of the commission in an Open Procedure under the Public Procurement Act (PPL) was published on the site of BTC on the extension of its gas transport network to the Bulgarian-Serbian border.

Simultaneously, the protocol has been sent to the three participants – DZZD Consortium Gas Development and Expansion in Bulgaria, Industries Fovallalkozo Zrt and Industries-KVV Kivitelezo Zrt, and Consortium Arkad. It reads the following: “The report contains the results of a review of the participants for compliance with the personal status requirements and the selection criteria. None of the three participants has declared subcontractors for performance of activities from the subject of the contract.”

The three participants have committed violations in filing their applications, according to BTG. “Due to the established deficiencies, on the basis of Art. 54, para. 7 of the Regulations for Implementation of the Public Procurement Law, a deadline has been given to the three participants to submit additional documents within the statutory period of 5 (five) working days in order to eliminate the deficiencies and to prove compliance with the personal requirements and the selection criteria set by Bulgartransgaz EAD,” the press release said.

At the opening of the bids on March 26, it became clear that only the Arkad had offered a price that is within the amount of EUR 1.3 billion, set by BTG. According to Arkad’s offer, the construction of the whole project will cost EUR 1.29 billion with a timeframe of 250 days, or EUR 1.10 billion should the deadline be extended to 615 days.
The bid of the second-ranked Italian-Luxembourg consortium is almost double – EUR 2.41 billion and EUR 1.60 billion for 250 days and 650 days, respectively.

“The final ranking of the bidders is forthcoming,” Vladimir Malinov, BTG Executive Director, told the public Bulgarian National Radio (BNR).

Construction company linked to the Sicilian mafia?

The company Bonatti S.p.a. has long been known to Italian prosecutors and investigative journalists. On December 14, 2016, BankWatch released the BankWatch Report CEE 2016 (PDF here) on the financing of the so-called Southern Gas Corridor of the European Union (EU), including pipelines for the supply of gas from Azerbaijan to Europe.

It is about two large-scale gas pipelines – the Trans Adriatic Pipeline (TAP) and the Trans-Anatolian Natural Gas Pipeline (TANAP). The report, entitled “Risky Business. Who Benefits from the Southern Gas Corridor,” mentions at least 15 key companies. The Italian Bonatti Group is mentioned in connection with building the TAP pipeline across Greece to the border with Albania and then by sea to Italy.

According to the report, in Italy, three of the pipeline companies or their subcontractors that had been tasked with the TAP have had links with mafia groups in the past. One of them, Bonatti Group, has been contracted to build a 760 km of the pipeline in Greece.

The authors of the Italian part of the report were Bivol’s partners from the Organized Crime and Corruption Reporting Project (OCCRP) – the Investigative Reporting Project Italy (IRPI). Our Italian colleagues have described in their investigations the situation with Bonatti’s ties with the Sicilian Cosa Nostra and the suspicious murders of its staff in Libya.

In 2010, the Sicilian company Edilperna, which had been hired by Bonatti to build a hospital in Verona, was served an “interdittiva antimafia” (a ban because of mafia ties) by the Italian police. This means that the public service contract with the company had been suspended due to suspicion of links with local organized crime groups.
In the same year, within the framework of an investigation by a group of prosecutors from Palermo, a number of “pentiti” (former mafia members) expressly mentioned Bonatti in their testimonies.

According to the witnesses, this has been one of the companies involved in agreements with the mafia on the construction of new buildings in Palermo since the 1990s, when a number of companies have unlawfully distributed construction deals among themselves and have ensured that part of their profits would go in the form of a “tax” to the Sicilian mafia. In 2015, the executive directors of two other companies hired by Bonatti in Sicily were sentenced to jail on charges of extortion and ties to mafia clans.

Bonatti is known for its work in dangerous regions, mostly in North Africa. In March 2016, two of its employees were killed after their kidnapping by Libyan militia. The Italian company is a subcontractor in a number of energy projects in Libya.

Bonatti denies claims of ties to the mafia

Bonatti has first declined to comment on the Bankwatch report but later told The Guardian the following: “The allegations concerning Bonatti and its subsidiaries referred to in the [original] Bankwatch Report [since amended to clarify the relationships between the companies] and reported by the press are groundless. Neither Bonatti or any of its subsidiaries have ever been involved in the events quoted and were never, and are not, subject to judicial proceedings related to the events quoted by the [original] Bankwatch Report.”

Big player linked to the ENI giant

Bonatti Group is one of the largest energy companies in Italy, with extensive operations not only in the EU but also in North Africa, mainly in Libya. There, Bonatti works closely with the Italian energy giant ENI S.p.A. (the company also submitted a bid for the pipeline projects South Stream and Nabucco and has been Gazprom’s top partner for years). The President and CEO of Bonatti Group is Paolo Ghirelli. The Group currently consists of 14 companies around the world, with much of its activity being concentrated abroad.

Bonatti also works in neighboring Romania. The office of its subsidiary Bonatti S.p.a. Parma Sucursala Bucuresti is located in Bucharest at Str. ALEKSANDR SERGHEEVICI PUŞKIN 10 Bucureşti sect 1. However, the company has been at a loss for five years, a check by Bivol in the Romanian registers established. According to official data, the company had been working in Bulgaria’s northern neighbor since 2012. By 2017, the company has 424 employees. Its annual earnings for 2017 amounted to RON 54.4 million against losses of RON 11.092 million.

IRPI journalist Luca Rinaldi commented for Bivol that Bonatti “had been generally considered a reputable company before these scandals occurred” (the employees killed in Libya and the testimonies of the former Mafioso about its connections with organized crime in the 1990s).
According to Rinaldi, what is 100% proven so far is mostly Bonatti’s lack of commitment to a safe working environment for its employees in Africa.

“The Libyan case is the first in Italy when a company has failed to guarantee the safety of its own employees.”
Luca Rinaldi is of the opinion that “this is a very important and indicative case” not only for Italian but also for European justice, given the size of the convicted construction company.

This is strong grounds for Bulgaria’s National Security Agency (DANS) to investigate how exactly does Bulgartransgaz carry out due diligence in cases of government procurement with budgets of over EUR 1 billion.

The information on the subject is not classified. Bivol’s reporters were able to obtain without any trouble the full text of the BankWatch Report in English, which can be found online by anyone who wants to read it, as well as the multi-page report on the activities of Bonatti Group from the Italian Trade Register.


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