Beneficiaries of unlawful forest swaps get minor punishment
In February 2010 Prime Minister Boyko Borissov, then in his first mandate, warned that Bulgaria might get fined by the European Commission for 132 forest land swaps carried out by the previous government led by Sergei Stanishev. Just after the country joined the EU in 2007, Bulgaria's parliament passed a law that allowed the swapping of privately-owned land for publicly-owned forest land - a transaction which Brussels estimated as incompatible with EU state aid rules.
Mr Borissov vowed that the state might have to be fined up to 1.5 billion euro if it fails to recover the incompatible state aid from the companies that had received it or undo the swaps concerned. In 2014, the European Commission stated that the swaps of lucrative forests on the Bulgarian seafront for land in the middle of nowhere in the country by selected businessmen had indeed amounted to illegitimate state aid.
But now that the state has finally decided to recover the sums from the beneficiaries it turned out that it is only seeking 40 million euro from the participants in 103 deals for the transfer of a total of 22,000 hectares of forest, which is way below the 1.5 billion euro fine Mr Borissov spoke about. Of course, there is something murky about the decision of the Ministry of Agriculture, Food and Forestry. According to local NGO Betonomorie ("Sea of Concrete" in Bulgarian), the financial gain from a single transaction of those 103 is higher than the entire sum sought by the ministry. In that deal, 1,000 hectares of forest near the seaside resort town of Balchik valued at 7.4 million euro in 2007 by the ministry was mortgaged for 76 million euro two years later by the new owner. Discrepancies like this one mean that the state-imposed fines are more of a gift to the selected businessmen of 2007 rather than a punishment for the illegitimate swaps.
The government gives extra 285 mln euro to state-owned Avtomagistrali in the dark
The Bulgarian government decided about a year ago to allocate 750 million euro to state-owned highways company Avtomagistrali for the completion of a 134-km long stretch of the Hemus highway that has to link Sofia to Varna. The logic behind that move was that if the state gives the money to a state-owned firm, the latter could commence planning and construction of the vital road without the inhibitions of public procurement procedures, which take a lot of time and are easily halted by unhappy competitors.
Even though the state-owned company had not built a single kilometre of Hemus since then, the state continued with its gifts to the highways company in November, again by means of an in-house contract with the government's Road Infrastructure Agency (RIA) worth 285 million euro for reinforcement works on 74 landslides alongside major roads.
What is more, just as the previous portion of the now a billion-euro allocation to Avtomagistrali, the procedure took place in the dark and was published on the website of RIA a month after the money had already been transferred. It is obviously impossible for the state-owned company, officially employing less than 300 people as of 2018, to complete both tasks, which means that it will likely subcontract the lion's share of the work to the traditional big players in the sector with ties to the government. But this will happen behind closed doors and without the scrutiny of the competition authority or the media.
Sofia heating utility: A bottomless pit of debt
Toplofikatsia Sofia, the municipal heating utility company serving over half a million Sofianites, has long been in dire financial straits. According to the company's most recent quarterly report, its outstanding debt has reached 440 million euro as of 30 September this year, up from 250 million in 2010, when the then state-owned company moved into the custody of Sofia Municipality.
Despite its perpetual shortage of revenues, the Sofia heating utility has decided not to sell its electricity output directly on the market. Instead, it has relied on a single electricity trading company to act as an intermediary when selling its electricity and received a fixed price. The company, Grand Energy Solutions, is connected to energy oligarch Hristo Kovachki, which likely explains why it has always been a partner of choice to the management of Toplofikatsia Sofia despite its poor track record of paying the municipality-owned company on time. Finally, after the 2019 local elections and pressure from new municipal councillors the heating utility decided to change its practices and look for better prices for its electricity production.