Landslides have traditionally been a favorite of construction companies. They're always unpredictable, need major fortification and become a great excuse for extra payments. And when everything is sealed with concrete, there is no way to accurately assess whether all the extra millions have gone to their intended purpose. In 2019, however, the last regular GERB government took another major decision on landslides, which swallowed nearly half a billion levs without much result so far.
Then, the road agency (RIA) entered into a contract for half a billion leva for the strengthening of various landslides, collapses and the like on the roads with the state-owned Avtomagistrali. The case is very similar to that of the 2018 dam repairs when the State Consolidation Company received 630 million levs from the state and gave it away to subcontractors without competition, and in many cases without need.
The argument for the landslide contract, also awarded without competition and transparency, was that it would "allow the timely, rapid and quality implementation of projects." This, of course, did not happen. A Capital weekly inquiry showed that work is proceeding extremely slowly - only three sites have been completed out of 84. According to the response to the media's Access to Public Information Act request, RIA admits that not a single new site was completed in the last year, despite more than 241 million levs having been paid out.
This new information confirms long-known conclusions: this contract does not seem to have been intended to get work done, but rather to repay private contractors in the form of interest-free loans. It is also evident that it was not well-planned, so that no real construction could start.
What do the numbers show?
The contract for the strengthening of 84 sites was signed on 23 October 2019. The then GERB regional minister Petya Avramova, who was the principal of the RIA and the state-owned company, explained the need for the contract by saying that these collapses and landslides "also appear to be a potential danger threatening people's lives and health." However, dangerous as they were, work on them could not start immediately - the administrative procedures were at a very early stage.
To this day, it is unclear on what basis these 84 sites were selected, 40 of which had apparent factual errors in the cadastral maps still uncorrected by 2021. "There were no projects, there was nothing, and still money was handed out," says Ivan Shishkov, regional deputy minister and minister in the caretaker offices of Stefan Yanev and Galab Donev. He explains that as a minister he has noticed how there is a lack of clear organization and coordination between departments. The stages of progression normally cover design, conceptual design, and then a detailed development plan.
According to a 2021 report by the Court of Auditors, Avtomagistrali had 129 contracts with 30 private companies, paying them 180 million levs including VAT before ever moving on to work. The selection of the companies themselves was also never transparent. Andrei Tsekov, Regional Minister from WCC-DB in 2023-2024, told Capital that he had asked the Public Procurement Agency whether Avtomagistrali had the status of a contracting authority, i.e. whether it had to issue tenders. The answer was yes. However, no tenders were announced.
And not only the lack of procurement, but also the use of subcontractors itself is contrary to the law. The in-house principle implies that a state or municipal company acts alone, and subcontracting is prohibited. The Court of Auditors wrote the following in its report. "With the conclusion of the contracts between Motorways and the third parties, a significant part of the soft procurement by the RIA is, in fact, subcontracted. At the same time, the advance funds of a significant amount (180.8 million levs including VAT) have been given to third parties who have been given the opportunity to dispose of a large public financial resource over an indefinite period. Advances have been granted even for projects for which no design assignments had been received from the contracting authority RIA by the end of the audit period,"
The result
A comparison with Capital's report from a year ago shows that not a single new site has been completed in that time. So far, the agency has paid 218.6 million levs in advances and another 22 million levs for three completed sites and one that is underway. However, the advances can neither be returned nor the contracts with the private companies terminated. According to Andrei Tsekov, the only reason for the latter would be non-performance. For now, however, the ball is in the court of the state institutions, because administrative procedures continue to drag on and the companies cannot be accused of not having done their job - for them this is impossible at this stage. "In the end, the combination of these illegal awards and the lack of project readiness for implementation shows that there was just a rush to give out some money, pay through the advances and the state is at the same time with its hands tied," he says.
The road agency never answered Capital's question on why construction has not started on at least 20 projects, whose designs were approved by an expert technical and economic council between 2020 and 2023. Nikolay Nankov, who was deputy minister of regional development for GERB at the time of the signing of the inhouse contract with Avtomagistrali, did not respond to calls from Capital. "There is no violation of the law, no corruption risk or any unregulated practice," he claimed in a 2021 interview with bTV on the case.
And who wins?
According to the Court of Auditors, 131 million levs of the total 181 million levs paid in advances went to three companies. Hemus Motorways has the most contracts - 22 for more than 123 million levs, and received the largest advance payment of more than 55.8 million levs. The company has not completed a single site so far. Jumbo 33 was completely unknown as of 2019, with fewer than 30 employees and a turnover of 4 million levs at the time, but it had received contracts with Automagistral for 20 sites and an advance payment of 48 million levs. Pernik's DLV received 27 million levs in advances on 10 contracts.
When asked whether contracts with external contractors had been terminated and whether indexation negotiations had been conducted, the state-owned Automagistriali did not want to answer. Instead, it requested that the questions be asked under the Freedom of Information Act which, in practice, sees most institutions take advantage of the maximum two-week response period. We had not received one by the time the issue was editorially closed.
Landslides have traditionally been a favorite of construction companies. They're always unpredictable, need major fortification and become a great excuse for extra payments. And when everything is sealed with concrete, there is no way to accurately assess whether all the extra millions have gone to their intended purpose. In 2019, however, the last regular GERB government took another major decision on landslides, which swallowed nearly half a billion levs without much result so far.
Then, the road agency (RIA) entered into a contract for half a billion leva for the strengthening of various landslides, collapses and the like on the roads with the state-owned Avtomagistrali. The case is very similar to that of the 2018 dam repairs when the State Consolidation Company received 630 million levs from the state and gave it away to subcontractors without competition, and in many cases without need.
