Agency for State Financial Inspection (ASFI) started two months ago a check of the Sofia Airport, the Banker found out. Inspectors are checking major contracts announced by Bulgaria’s largest airport in recent years, and what contracts and with which contractors they have been concluded. It seems that the red lamp that has long been on, has now been caught the attention of the state.
Otherwise, if one looks at the messages regularly sent by the press office of the state company, one will remain under the impression that all is going smoothly there. The number of passengers at the two terminals is on the rise as is the number of serviced aircraft. Behind the curtain, however, things are quite different. Recently the Sofia airport confidently flies down. It lost a huge share of the home market and dramatically contracted revenue and profits. And all this happens, given that the opening of the new Terminal 2 was as recently as the end of 2006 and the increase in number of passengers went to over 3 million annually. The airport could offer promotional and commercial properties comparable to those of some of the biggest malls in the country. In 2007 it reported a profit of 21.856 million levs, and in 2008 – an impressive 30.212 million levs. Then the crisis hit also the aviation – and the profit for 2009 decreased to 14.9 million levs. The year 2010 was a little better – 15.334 million levs, for 2011 it generated 12.27 million levs and in 2012 this fell to just 9.44 million levs. But it turned out that it might be worse. Situation last year seemed to have improved. The airport reported a profit of 12.526 million levs, but 7.935 million levs of this came from non-specific activity of the airport and in particular from the sale of land. That is, without this amount annual profits would collapse to the tiny 4.5 million levs.
The situation continues to deteriorate and in 2014 – for the first nine months the port recorded a mediocre airport financial result of 3.972 million levs.
This negative trend caught the attention of lawmakers in the previous Parliament. In 2013 Georgi Svilenski and Strahil Angelov from the Coalition for Bulgaria filed a request to their party comrade Transport Minister – Daniel Papazov about the uncollected receivables and major debtors of Sofia Airport. After a series of riddles and delays MPs did not receive adequate responses from Papazov, but now these might be provided by the check of ASFI.
People familiar with the internal affairs of the company say that for each contract the winner was known in advance. There's a rumor that one of the former members of the board even had access at home to the internal tracking system of the announced procedures. If this really is the case is a job of the competent authorities to say. But the fact is that the contracts to which ASFI should pay attention, are not one or two.
In June this year, a tender was announced for the supply of two pieces of high-tech cleaning machines to clean in the winter the take-off and landing runway, the taxiway and the platform. The exact amount was not specified, but from the guarantee of participation it is clear that this technique will run to a minimum of 2 million levs. The procedure is not yet complete and the question is still hanging: who actually need it? People working at the airport are well aware that the airport has more than enough snow throwers. One can remember the big snows in early 2012 when due to the snow blowers of the airport, state managed to completely clean the frozen highway Hemus.
In November 2012 the port opened a procedure to clean the two terminals. Yet at its opening there were doubts that conditions had been written for a specific company to win, despite the extremely inflated prices. The airport has set the bar with the requirement for applicants to demonstrate a minimum of 15 million levs turnover in the last three years. It was therefore not surprising that bids were submitted only by Varna Vicky Comfort of Lachezar Petrov, the consortium of Airport Clean (Skanclean, Vassilka Sofia and Skavas Control) and the Italian company S.P.D . Ltd., which in Bulgaria is represented by Germano Viga. To the final listings the evaluation committee allowed just the last two contenders, eliminating Vicky Comfort because of missing quality certificates of certain products. The unsuccessful candidate appealed to the Commission for Protection of Competition, which in turn established that the two admitted to negotiation S.P.D. Ltd. and consortium Airport Clean did not meet the requirements of the contracting authority and were classified in complete contradiction with the regulations. In response Airport Clean challenged this opinion to the Supreme Administrative Court. Interestingly, to this cassation appeal joined also the management of Sofia Airport and in a very short time – just 12 days supreme magistrates shattered the allegations antimonopoly body and restored the status quo.
Subsequently, a new problem emerged – due to the requirement the cleaning to take place with the current cleaners working for the airport whose contracts had to be transferred to the private company winner. Strangely in the preparation of methodology the transfer of the part of the staff envisaged first people to be laid off, instead of using Article 123 of the Labor Code, which provides for the maintaining the contract in a change of employer. This made trade unions protest. The then Minister of Transport Daniel Papazov promised to find a reasonable option for the transfer of the cleaners and after the process they to be financially incentivized to better perform their duties. But later Papazov had second thoughts and in late October 2013 recommended that the management of the airport should just terminate the contracts.
Many disputes have been sparked by the tender announced on 19 August 2013 for hiring of thirteen retail stores located within the airport. One of the conditions was the applicants to be owners of at least 20 stores and have at least 150 employees to ensure that they are financially sound – they also had to show a turnover of at least 9 million levs for the last three years and a minimum of 300,000 levs in profit or tangible assets. On the top of it all they had to show a minimum of five years' experience with an establishment at an international airport, which just shrank the number of possible contenders.
There are many more examples, and certainly the financial inspectors will not be bored while checking. They will do much good if the bury themselves not only in large, but also in smaller procurement procedures of Sofia Airport. Insiders believe that most of them were deliberately separated to pass below the required threshold of 66,000 levs for announcing a public procedure. It would be not bad if new Transport Minister Ivailo Moskovski paid attention to this. This way there will be no wonder lately as to why the financial performance of the airport deteriorated.
