Ex-Lawmaker from Bulgaria’s Ruling Party Got 500 Million for Coal Supply to Power Utility Mind the horns!

Public tenders in the amount of 1,140,363,214.88 levs are virtually undetectable on the website of the Public Procurement Agency (PPA) and have no announced contractor. They can be found only by their unique order number.

Bivol discovered this phenomenon in late 2015, when processing the open government data. These “secret” tenders are mainly from State-owned enterprises such as Bulgartansgaz, enterprises in which the State has shares, such as the electric power utility CEZ, but also government agencies and ministries. The full list can be seen here.

At the end of 2015, Bivol released the first version of the search engine for open data procurement, published on the government portal. In early 2016, data have been updated and now cover the period 2007-2015. The initiative to publish in computer-readable form the registers of the State is key to shed light on the work of the State machine and is probably the most sensible thing done so far by the government of second-term Prime Minister Boyko Borisov. However, it is also a challenge for investigative journalists. We had to process in a short time large amount of data and supplement them “manually” with the missing information from other registers in order to identify problem cases. Ultimately, this exercise in data journalism yielded results. It unveiled the enormous amounts awarded to companies of controversial lawmaker Delyan Peevski and his party Movement for Rights and Freedoms, including projects financed with EU money. There is no way to know for sure whether this information that has been public since the beginning of the year has affected the new policy of the government to review all public procurement, but we can say with certainty that the interest in these data from embassies and the European Commission is substantial.

Those secret agreements do not mention tax registration numbers or the name of the contractor. Bivol approached for comment PPA and was told that it was a matter of contracts “concluded with exemptions from the scope of the law”.

“In such cases the decisions and notices of the opening of procedures are not made public, which is why there are no records of them in the Public Procurement Register (PPR). Further, the contracting authorities are not mandated to publish in PPR information about contracts. If they wish, they can do that, but the information is published without further processing. This is the reason why it is impossible to establish the connection between the contracting authority and the contractor in the advanced search form,” people from the State agency explained.

After the remark that the information on the contracts is available, but access to them is incomprehensibly limited, PPA released a separate list of these contracts for the period from January 1, 2007 to December 31, 2015 – they are a total of 625 such contracts in the amount of 1,140,363,214.88 levs. In Bivol’s search engine, they can be found with the keyword WHO for the contractor. The link to the document with the results for WHO can be used to find data from the PPA’s site. In this way, the hidden contractors can be identified one by one and interesting dependencies can be established. For example, it appears that

CEZ has given nearly 500 million levs to companies of an MP from GERB

Almost 40% or 478,463,533.19 levs from the hidden contracts in the amount of one billion levs went to the Thermal Power Plant (TPP) Varna, which is owned by CEZ. These are several major contracts for coal supply, concluded with two companies.

925,000 EUR for “EVROKVEST Energy” Ltd.

1,900,000 EUR for “EVROKVEST Energy” Ltd.

34,212,500 EUR for “EVROKVEST Energy” Ltd.

54,948,000 EUR for “EVROKVEST Energy” Ltd.

46,512,000 EUR “BULMINERAL” Ltd

104,500,000 EUR “BULMINERAL” Ltd

Total: 245,822,500 million euro.

“EVROKVEST Energy” Ltd. is owned by the company “COMMERCIAL”, which is owned by “METALLIC” in which the main shareholder is “DECHKO KOLEV – IDA” ET. The sole owner, Dechko Kolev, is the father of

Ivan Dechkov Kolev, MP during the first term in office of the party Citizens for European Development of Bulgaria (GERB), who, before being elected on GERB’s ballot, had participated in “EVROKVEST ENERGY” and was manager of “METALLIC”.

An inquiry of Bivol in company records also showed that “BULMINERAL” Ltd. is owned by EVROQUEST GROUP LIMITED AD (Marshall Islands) and has shares in EVROKVEST ENERGY TRADING LTD.

All these contracts were concluded in the period 2010-2011, when Dimitar “Mitko the Karate Player” Stefanov was member of the Supervisory Board of “CEZ Bulgaria” JSC. He is a person close to GERB and proxy of companies of Rumen “The Pasha” Nikolov, as an investigation Bivol revealed in 2013.

Sources from the headquarters of CEZ in the Czech Republic told Bivol that the appointment of the “Karate Player” has been the condition of the government to grant the company a license to operate in Bulgaria. Hundreds of millions of levs have been siphoned from the company by the “Karate Player” and another middleman. This has been done mainly through public procurement. A similar thing happened in Albania, where, however, unlike Bulgaria, the CEZ corruption schemes were exposed and its license was revoked in 2013.

It is not clear whether these awarded contracts, revealed by Bivol, have been favorable for TPP Varna, but it is clear that the plant was eventually closed by CEZ because it did not meet the European requirements. Bringing the plant in line with environmental standards was not financially justified, the company explained then.

Bivol asked CEZ whether the coal has been delivered and by whom. The terse reply was that TPP Varna is accountable to the Commission for Energy and Water Regulation. CEZ also pointed out that under the Public Procurement Act, procedures for public information do not apply to the supply of fuel for electric energy production.

The list of the 625 hidden public tenders contains other interesting facts that Bivol is investigating. The results will be summarized in a detailed investigative report which will be sent to the government and the European Commission.

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