Bulgaria inexplicably waived BGN 26 million in fines due to the failure of the strategic project for the expansion of the gas storage in Chiren, which is of national and European significance. This case reveals serious violations and abuses documented in an investigation by the Anti-Corruption Fund (ACF).
The project, which was supposed to be completed with the drilling of 13 new wells by November 26, 2024, was canceled without clear justification. Additionally, „Bulgartransgaz“ agreed not to seek penalties or damages from the contractor, „Glavbolgarstroy.“
The ACF investigation, entitled „Chiren:procurement with a comfortable slant“, is based on unpublished documents and testimony of Velko Peev, a former internal auditor of „Bulgartransgaz“. Its audit revealed numerous violations, including:
- Unauthorized changes to the technical parameters of the project, which reduce the contractor’s costs but increase safety risks.
- Delays and lack of progress in construction, despite the majority of the contract sum being paid in advance.
- Replacement of subcontractors with companies lacking experience in drilling, including firms related to Delyan Peevski, sanctioned under the Magnitsky Act.
The project, valued at BGN 221 million, threatens Bulgaria with:
- Loss of 78 million euros of European funding due to non-compliance with deadlines.
- Inability to expand the capacity of Chiren, which is crucial for the country’s energy security.
- Serious safety risks associated with the use of unsuitable technologies for the drilling operations.
According to lawyer Denitsa Rukanova from the Anti-Corruption Fund (AKF), „the change in the terms of the contract during its implementation is a serious violation of the law and has caused the state a loss of over BGN 90 million.“ Velko Peev’s report has been submitted to the State Agency for National Security (SANS), the European Public Prosecutor’s Office, and the Ministries of Energy and Finance, but has received a weak response. Only the European Public Prosecutor’s Office has taken action, conducting a search of „Bulgargaztrans“ offices in August 2024.
Meanwhile, Velko Peev has been dismissed on formal grounds and has started receiving threats to his life. Despite the corruption reports and serious violations, Bulgarian institutions remain passive. The failure of the Chiren expansion project highlights the serious problems in managing strategic infrastructure projects. The Anti-Corruption Fund (ACF) will continue to monitor the institutions’ responses and keep the public informed.
„The question is who will take responsibility?“, the ACF Director Boyko Stankushev commented.
The case of the Chiren expansion highlights the need for stricter control and transparency in public procurement, especially for strategic projects. The failure of this project is not only an economic blow but also a serious threat to the country’s energy security.
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