The project for South Stream gas pipeline proved to be in the maelstrom of foreign and domestic passions and it seems that it would strain Bulgaria’s relations with European Union to the extreme. Last week it became clear that Brussels opened an infringement procedure against Bulgaria for the tender procedure for construction of the facility and urges the authorities to stop all activities in its construction. A letter from Directorate General Internal Market and Services was sent to the Bulgarian authorities on 2 June and from that date a period of one month begins to run so tha Brussels obtains the required answers. If they prove to be inadequate, the Commission may send the case to the European Court. Then financial sanctions may be imposed.
These actions were taken after it became known that Stroytransgaz Consortium will build South Stream. Half of the shares in the company are held by the Russian Stroytransgaz, majority-owned by Gennady Timchenko, a friend of Russian President Vladimir Putin, a businessman appearing in the black list of U.S. sanctions on persons close to the Kremlin because of the crisis in Ukraine. The other 50 percent are controlled by five Bulgarian companies, Industrial Construction Holding, Technoexportstroy, Glavbolgarstroi, Ponsstroyengineering and PST Holding united in the joint stock company: Gazproekt South.
As the Banker weekly repeatedly wrote, the selection procedure itself caused a lot of questions since it was announced twice, but never took place in the order described by the Public Procurement Act. The first time it was in late October 2013, and the deadline for participation was only 15 days, when the candidates failed to prepare their bids. Then the competition failed and in December was reopened anew. It ended on January 10 and documents were submitted by 11 consortia.
The penal procedure of Brussels came after a television interview with the President of the Board of Directors of Gazprom Alexey Miller last weekend. In it, he confidently said: „The European Commission can not stop construction – no one can forbid us to build. Our answer is very simple: in December 2015 the first gas sent through the sea pipeline across the Black Sea will come in Bulgaria. It will come to the European Union.“
Obviously, at this time the state is between the hammer and anvil. The government assigns extremely high hopes that construction of the pipeline may begin this year and boost the economy, yet the failure to observe the European legislation entails many negative consequences.
On the same June 2 Ministry of Economy issued a position which says that Bulgaria is a member of the European Union and repeatedly strongly committed to comply with the European legal framework for the implementation of the project South Stream on Bulgarian territory. We are now expecting letter of formal notice from the Commission, which presents the issues on which it requires comments and will respect this deadline for a response. The process of selection of a contractor for the design, supply of materials, construction, staff training and commissioning of the Bulgarian section of the South Stream pipeline, which refers to the statement of the European Commission has followed legal procedures in Bulgarian and European legal framework. Complete information will be provided in Brussels.
Only days later, however, the opinion of the socialist party leadership changed and urged Bulgaria to show character and finalize the construction of the South Stream, regardless of sanctions. „We still remember 2008 when gas deliveries stopped. Bulgaria has fulfilled all the rules that the European Union has set for South Stream. We have no concerns in this regard, if there is pressure, it is political,“ told a press conference after a meeting of the Executive Bureau of the party vice-chairman of socialists Dimitar Dabov.
According to the information requested by the Bulgarian Energy Holding, and it turned out it made tender to choose a builder, not a public procurement procedure.
The BANKER
