State-owned Bulgatransgaz will invest one million levs towards the expansion of its gas transmission system to Varna TPP owned by the honorary leader of the Movement for Rights and Freedoms party Ahmed Dogan. The power plant requested the expansion in order to procure more gas for its 3 operational units.
The catch is that Varna TPP is a reserve electricity supplier, part of the so-called cold reserve which is connected to the grid in case of a major supply disruption. The contract worth 26.5 million levs for 2019 was made possible when Mr Dogan acquired the power plant in 2017. The previous owner, Czech energy group CEZ, had mothballed Varna TPP because its electricity is too expensive. Immediately after the acquisition the Electricity System Operator included the power plant in the cold reserve and signed a supply contract.
Since Varna TPP is switched on very rarely, it has almost no variable costs and most of its revenues are booked as profit. Now it can operate just one unit but after the expansion it will be able to switch on all of its units, increasing the profits of Mr Dogan threefold.
Bulgaria's National Assembly recently cut state subsidies to political parties from 11 levs (5.5 euro) per vote for every party that passed the 1% threshold at the last parliamentary elections to one lev per vote. What is more, parties were required to return retroactively 7 million euro in subsidies for the first half of 2019.
To compensate for reduced subsidies, legislators took an equally controversial decision to lift the ban on donations from private companies and abolish the ceiling of 5,000 euro per year for donations by private individuals. Only businesses with delayed dues to the state or those registered offshore would be barred from donating. The changes placed no restriction on companies which win public tenders to donate money to political parties.
According to many observers, including the Bulgarian charter of international watchdog Transparency International, this move would pave the way for oligarchic interests to increase their stranglehold over parties and boost corruption. Furthermore, it would hit smaller parties the most, undermining political pluralism. Those opposed to the changes were MPs from the opposition Bulgarian Socialist Party who called the decision "legalized political racketeering".
The change comes almost three years after 2.5 million Bulgarians voted to decrease the subsidies through a referendum ushered in by (now ex) showman Slavi Trifonov and his team, and just after he announced he would be leaving bTV to launch a new TV channel and a political project.
Relatives of convicted ex-MP continue winning railway maintenance tenders
Companies of relatives of the convicted ex-lawmaker from the Movement for Rights and Freedoms (MRF) party Iliya Iliev have won new public tenders worth tens of millions of euro for the maintenance of Bulgarian railway infrastructure. Mr Iliev was convicted of siphoning off millions from state-owned National Rail Infrastructure Company (NRIC) earlier this year. The companies IKS and Energy Group 2003, owned respectively by Hristo Yankov, 21, and Yanko Yankov, 26, have won over 40 million euro worth of railway maintenance tenders in the past few years. The two young businessmen are cousins of Mr Iliev.
Companies of the Iliev family have a long track record of outbidding far more experienced firms, including international ones, in NRIC tenders. And while the court proved in the spring of 2019 that Mr Iliev had facilitated embezzlement of funds from NRIC through the issuing of fake documents, the state-run company seems to be going out of its way to continue awarding contracts to companies related to his family. In August alone the family-run businesses won 7.5 million euro worth of tenders even though they could not prove sufficient experience in delivering the required goods (1150 tons of railroad tracks), after all of the other bids were eliminated on various grounds.
The reason for the family's success may lie in the colourful political past of Mr Iliev, who now has his own Roma party, DROM, and was city councillor of the ruling GERB party in Sofia before joining MRF. Apart from receiving a suspended sentence for embezzling 1.5 million euro from NRIC in 2011, Mr Iliev is currently indicted for vote purchasing during the 2006 and 2014 elections.