Turkstream has long been touted as one of the main reasons for Russia's invasion of Ukraine last year. By cutting Ukraine out of the gas routes map, Russia had all the leverage to attack Ukraine while continuing to supply Europe with gas. This meant that it continued to receive huge amounts of money to fund its war machine.
In the past week leaked documents have shown the massive role played by former Bulgarian cabinets in the building process, essentially paving the way for Russia's criminality in Europe.
The last GERB cabinet, and more precisely former Prime Minister Boyko Borissov, violated Bulgarian legislation and ignored national and European interests to grant Russian President Vladimir Putin's wish for a gas route that bypasses Ukraine and reaches Serbia and Hungary. The extension of the gas pipe TurkStream, for which Bulgaria paid nearly BGN 3 billion without clear financial benefits, provided vast guaranteed revenues to Russian giant Gazprom.
Another salient fact emerged last week, adding to the already burgeoning evidence. A team from the Bulgarian NGO Anti-Corruption Fund (AKF) revealed information and photos from the hacked mail of Russian politician Alexander Babakov. Sanctioned several times since 2014, Babakov has been named as one of the organizers of the secret financing of political proxies in various countries. It is clear from the leaks that on July 1, 2019, in Istanbul, the "Bulgarian, Russian and Arab countries" negotiated exactly how to build the Turkstream through Bulgaria. This happened after the Bulgarian gas state company Bulgartransgaz had already opened the bids from candidates in which the Saudi "Arkad" (Arkad) was ranked in first place, and actually revealed that the Law on public procurement had been grossly violated.
There was no official information about these secret arrangements, but at the signing of the contract with Arcad on September 18, 2019, then Prime Minister Boyko Borissov virtually conceded them: "It cost us a lot of effort, but through a transparent procedure, the state company of Saudi Arabia ranked first and from tomorrow we can begin the project" . He continued, rather contradicting himself, citing protracted negotiations "including with Russian partners, and with colleagues from Saudi Arabia".
What law?
The order for the construction of "Turkish Stream" through Bulgaria was surprisingly announced days before Christmas 2018 and its implementation was accompanied by the biggest scandal in the history of public procedures in Bulgaria. On April 3, 2019, the contractor Bulgartransgaz had ranked the Arkad consortium first in the tender (lowest price offered), but instead of signing a contract with them, the state company decided to unilaterally remove the Saudis and opt for the second bid - a Russian-linked company, which even changed its price offer after its bid had been opened.
A 50% share in the consortium called Gas Development and Expansion in Bulgaria was held by a Luxembourg company, whose owners are two subsidiary companies of the Russian "Pipe Metallurgical Company" - TMK Holding and TMK Steel Holding . In addition, the legal director of TMK Andrey Zimin was on the board of directors of the Luxembourg company.
The case reached the Commission for the Protection of Competition after the Saudi candidate filed a complaint, and at the end of June it overturned Bulgartransgaz's decision as illegal - otherwise it would simply have made a mockery of the country's public procurement system.
A counter-appeal followed from "Gas Development and Expansion in Bulgaria" to the Supreme Administrative Court. Before that, however, the secret meeting in Istanbul took place, where a direct agreement between the two participants in the procedure was discussed. Curiously, in Babakov's notes, the Russian consortium is described as "TMK-Bonatti-Streicher", although officially TMK is missing from the tender documents.
Particularly shocking are the revelations of certain discussions being held such as hiring a contractor candidate as a subcontractor for part of the project, which is completely prohibited by the Bulgarian Law on Public Procurement (all subcontractors must be announced in advance).
The under the table negotiations became apparent a little later, when the Luxembourg entity withdrew the complaint on behalf of the consortium Gas Development and Expansion in Bulgaria . Thus, on September 16, 2019, the Supreme Court dismissed the case, and two days later a contract for the construction of the gas pipeline was signed with Arkad.
By that time, the pipes for the entire route (over 400 km) had already been produced by the Russian TMK and were unloaded at the ports of Burgas and Varna - a fact which in itself is absurd, because no one would pay and deliver pipes without knowing the contractor of the project and without having a signed contract for it. But apparently the Russians were convinced that the Bulgarian government, and Borissov, would fulfill their commitments and ensure the implementation of the project.
More favors to Putin
In order to circumvent the European requirements that one entity cannot hold more than 50% of the capacity of a given pipe and at the same time be its owner (Gazprom's main goal), an auction was held in Bulgaria. This was for reserving capacities not for the transit route of the entire gas pipeline, but only for its entry-exit points. Thus, formally, the pipe is not occupied by Gazprom, but since the capacity of both the entrance and the exit is reserved by the Russian company, in reality no one else has the right to use it. The GERB government's boast of free capacity of 15-20% was just a bid to pull wool over our eyes, and subsequent auctions actually proved this.
In addition, thousands of workers and equipment from third countries (Russia and Belarus) were imported to Bulgaria without any problems. And even the Bulgarian army participated in the transfer of the equipment.
There was no official opening for the project, no ceremonies, but neither were there all those tests and procedures that delayed the gas connection with Greece for months (ICGB's construction took way more time).
Energy geopolitics
Two years have passed since Turkstream has been operating in Bulgaria, and it is clear that it benefits only Russia - it provides a corridor for Russian gas to Serbia and Hungary and makes regional energy dependent on Russian fuel. From a financial point of view, the transit fees that Gazprom pays will barely cover the investment costs in the next 15 years. And until then, there is no certainty that the project will be used at all given Russia's war against Ukraine and the EU's new energy independence policies.
Borissov stubbornly defended the gas pipeline on the grounds that with it Bulgaria would maintain its position as a gas distribution hub. However, it turned out that this was a lie, since the country could not redistribute Russian transit and, along with that, could not use the pipeline for the transfer of alternative gas.
Turkstream has long been touted as one of the main reasons for Russia's invasion of Ukraine last year. By cutting Ukraine out of the gas routes map, Russia had all the leverage to attack Ukraine while continuing to supply Europe with gas. This meant that it continued to receive huge amounts of money to fund its war machine.
In the past week leaked documents have shown the massive role played by former Bulgarian cabinets in the building process, essentially paving the way for Russia's criminality in Europe.
