Christmas gifts for employees in Bulgaria’s Ministry of Environment and Waters came this year earlier. Last week, Minister Iskra Mihaylova signed contracts for the delivery of new cars designed for those working in national parks Pirin, Rila and the Central Balkan and regional environmental protection inspectorates in Blagoevgrad, Burgas, Varna, Montana, Pazardzhik, Plovdiv, Ruse, Sofia, Stara Zagora and Haskovo. Vehicles will cost a total of over 3.1 million levs, with funds provided by the Environment Operational Programme, under the project Transport and technical support for the implementation of activities in protected state land.
After four-month-long contest Minister Mihailova has chosen ultimately the Lovech company Litex Motors for the supply of 51 commercial off-road vehicles. They will be the Steed 5 pickups, the only models in this segment, assembled in the factory of Great Wall in Bulgaria. The contract says that the ministry has agreed to pay for the vehicles 2,090,490 levs without VAT, which makes 49,188 levs with VAT per vehicle . It is interesting, however, that the manufacturer’s website now sells pickups whose prices range from 26 990 to 36 990 levs. That is how the state will pay nearly 35 percent more than the advertised price. Even if we suppose that the officials will take their vehicles with all the bells and whistles, their price in the catalogue of the company again reaches a maximum of 46,000 per share. So for now remains a secret what the state will receive against the other over three thousand levs per car in the contracts with Litex Motors.
The nice thing about the whole story is that it still supports Bulgarian production, but there is one problem that can seriously shake the deal. It is connected with the Law on economic and financial relationships with companies registered in jurisdictions with low tax and their beneficial owners, which is expected to take effect from 1 January 2014. If this happens, this will cut off access to public procurement for all offshore companies and their subsidiaries in the country and the already signed contracts will be canceled. Behind the owner of Litex Motors, Litex Commerce stands such company – the registered in the British Virgin Islands Litex Investment Limited. Of course, the new law provides also a loophole for getting out of this situation.
Otherwise, apart from the pickups for the employees in national parks Pirin, Rila and the Central Balkan, there will be another 11 off-road cars. For their delivery the state selected Ratola Leasing, which is the distributor of the Korean company Ssang Yong. What model and brand exactly the vehicles will be is now hard to say. It is known, however, that the eleven cars will cost just 560,511 levs without VAT, which makes 61,146 lev with VAT per unit. Another issue is that in the catalogues of Ratola there is no terrain car priced over 60,000 levs even with premium equipment.
The BANKER
