EU Programme for Businesses Ruined by Bribes

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It is a public secret that no one at the top of the state administration wants a real change. So nobody should be surprised that the funding schemes are only for those businesses that have warm ties with the Ministry of Economy. It is no secret that the experts there get at least 10% commission on each approved project. And if anyone gives more goes ahead in the rank list

even if they fail to meet the requirements. Several officials of the ministry left the civil service to make their own consultancies through which to get the perfectly legal commissions in question. Only that the candidates for paid success last year became too many, and as the director of the Competitiveness Operational Programme Eli Milusheva says: “The increased competition distorts the process.”

The explanation that competition between companies is at the heart of the problem should not be dismissed light-heartedly. It reveals the full weakness of officials and absolute irresponsibility in absorption or in some cases – the loss of EU funds. Because Milusheva is here today, and tomorrow she will not be, but the created havoc will continue to burden the businesses.

What really happened? In the previous procedure called “Technological modernization of small and medium enterprises”, with a budget of 97.5 million levs, applications were received for more than 1,200 projects totaling over 730 million levs. On May 23, 2014 the decision of the managing authority was announced, under which the funding had to be distributed among 142 projects. As a rule, contracts should be concluded within a month, but exactly on 23 June Eli Milusheva surprising for all announced that she terminates the procedure for technological modernization. The reason identified was the unprecedented number of complaints received and signals for violations in the evaluation of proposals, some even allegedly bordering on crime. The principle of equality was allegedly violated, and in the course of the procedure criteria were changed. There were also doubts about the illegal relationship between the contracting authority consultants and companies as commissions ranged between 7 and 10 percent of the cost of a project. Guilty were not found, and as often happens in the country, was held to a shared responsibility.

The next day (June 24), most of the approved companies filed complaints before the Administrative Court in Sofia against the decision to terminate the procedure. They were identified as legitimate by magistrates. The complaints later submitted by other companies, with identical objections, were dismissed by the same court. For this paradox no explanation will be given. Nevertheless, a week ago all 142 companies that had to obtain financing, sent a letter to the economy minister Vasil Shtonov. In it they argue that the decision of Milusheva would be disastrous for the whole EU Competitiveness programme as this would compromise the management and control while creating favorable conditions and threats to stopping all payments. One such action would effectively bankrupt the state budget due to the fact that the on-going contracts are totaling 1,472,383,000 lev. It is understood that if the payments stop, the state will be forced to cover its obligations under them.

Moreover, the companies explained that the termination of the procedure have already been taken to the successful execution of contracts and budgetary commitments and obligations to counterparties and banks. “Thus, through an unlawful decision Milusheva deprives 142 Bulgarian SMEs of the opportunity to conclude contracts and to implement their projects, which will only benefit the Bulgarian economy having into account the planned investments, the creation of new jobs, technological innovation and expansion of the export opportunities for new products. The negative consequences of it will liquidate the domestic market and will affect disastrously the contacts of companies internationally, since they will not be able to fulfill their commitments to their partners, ” says Mariana Pecheyan, manager of VSK Centaur – IZ Dynamica LTD. Mrs. Pecheyan held a private meeting with Milusheva to try to understand the specific reasons for her actions, but the result was not positive. “Mainly I was attacked with allegations – says she – that investigation was ongoing; she tried to frighten me with the security services and she even ventured into asking me to explain where I got information to prepare my complaint to the court, and blatantly stated that she is the person who can stop and redirect funds from this procedure to “Energy Efficiency”.

After a period of silence on the issue, probably due to the need to examine in detail the facts last week Minister Shtonov announced that the country did not lose any money under the programme “Competitiveness”. He said that by the end of the year over 192 million euros worth of grants must be certified. So far the ministry has processed 118 million euros and 16 million are undergoing approval procedure. “The certifying authority had comments on three old procedures. Irregularities have been removed and yet on August 20 we received the green light to pay for one of them. In an optimal time we will do the comments on the other two and we will be thus waiting for another 25 million euros to be submitted to certifying to the Authority. The remaining 33 million euros will be disbursed to the businesses and certified by the end of 2014, ” the minister said.

How quickly the process will be reorganized so far no one is willing to say. And in the upcoming parliamentary elections these issues are even more important. Because the new rulers may have different views on things and still run in a vicious circle. In the same time the 97.5 million levs in question are no longer there. According to the decision of Eli Milusheva they had to go to the reserve list of projects under the “Energy Efficiency”, but the terms of such maneuvers expired on June 30, without anything having been signed. In other words, in 2015 the country will have to write off these amounts automatically as non-absorbed and Brussels will take the money back.



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