A state-owned company whitewashes the damage from a failed railway project for BGN 120 million.

The National Railway Infrastructure Company (NRIC) has quietly assigned construction works on the modernization of the railway line Sofia – Elin Pelin to “Transport Construction and Rehabilitation

“” /TCP/, a company under the umbrella of the Ministry of Transport. This works entirely in the interests of the failed initial contractor – the consortium “
Kelette AB
” DZZD, associated with the interests of Ivan Mirinski and Delyan Peevski. Moreover, companies associated with Kellett have also lined up for the new tender for the scandalously failed railway project, costing BGN 120 million to the European taxpayer.

The Sofia-Elin Pelin project was won

and started by a consortium between the Hungarian company Kelet-Ut

and the Haskovo construction company AB

” Jsc . It was terminated in 2022 after it became clear that the money was absorbed at 80 percent, and only 40 percent of the activities were carried out.

Правителството бърза да плати 100 милиона на фирма свързана с Пеевски преди Еврокомисията да ги одобри

Instead of making a quick revision of what has been done, missing, etc. by a certified body, NRIC has been beating the ball for more than 6 months, concealing the severity of the situation through a scandalous
in house
procedure. Part of the contract was
awarded
to the state
TSA
, which has to implement it with budgetary resources.

In parallel, the contractor “Kellett AB

” sues NRIC

, claiming enormous damage. Thus, despite the obvious scandal with the non-fulfillment of the contract, Kellett AB is in a favorable situation:

• She has absorbed almost the entire budget to do a very small (and completely dysfunctional) piece of work.
• The GFF will carry out the works that the consortium has not carried out. After that, no one will know who did what and when, as there are no officially signed documents for the undone works.
• Third, Kellett AB claims damages in court and is very likely to win because it can still count on “full support” from NRIC, which is doing everything it can to lose.

The “Black Box” TSV as the scheme “Motorways”

However, the inclusion of the GFF does not only serve to cover up traces and complete work that must have already been done. Both in the past and today, this company serves as a “
Black Treasury”
for problematic contracts in the Bulgarian railways and not only.

The same company “did the work” on the dredging of the port of Varna, without having a single ship, but only as an intermediary in order to obtain a Russian company a huge state contract financed with European money.

In the case of NRIC, the TSV acts differently. The GFF receives state subsidies every year to maintain a certain number of personnel and equipment, as it has to provide urgent repairs to critical transport infrastructure in the event of an emergency.

Accidents become rare, but the technique does not collect dust, on the contrary. The company selectively helps NRIC contractors who are troubled with their projects by providing them with the necessary resources. GFF services are paid at prices far below the market prices, but it is close to the mind that there may also be a hidden price in the form of commissions for decision-makers in the Ministry of Transport and NRIC.

Also applied in house the scheme, which became popular in the road sector with the internal contracts of the state-owned company Avtomagistrali for the construction of Hemus Motorway. As a state-owned company, TSV receives the award without tender of large contracts at a very good price. The works are then subcontracted, which are carefully selected Bulgarian construction companies, ready to pay large commissions to all decision-makers reaching a mind-boggling 50% or more of the value of the subcontractor.

In the case of the project for modernization of the railway line Sofia – Elin Pelin, TSV currently plays both roles:

• Currently, the TSV is performing works that are supposed to have been carried out long ago by Kellett AB, allowing them to claim that these same works were done by themselves. Currently, Kellett AB and NRIC are still in litigation and there is no agreement between the parties on which works are being carried out.
• NRIC assigned without a tender to TSV to complete the section Sofia – Iskar at a very good price and with a very unclear scope.

It is an open secret that all these schemes are controlled and set in motion by the Almighty Ivan Mirinski, right hand of Penalties under the law “Magnitsky” Delyan Peevski, who for many years was the formal owner of “Vodstroy 98“, subsequently renamed “VDH” AD and bought by Varna “Hydrostroy” AD on Veliko Zhelev. Mirinski is not present in the Haskovo company AB AD, which, according to the Capital newspaper, is “the new builder of Peevski”. Mirinski’s role in the last 10-15 years under various governments has been at a “marshalling yard” for money in the infrastructure construction sector (especially the railways) in Bulgaria.

New player under the old “Hungarian scheme”

The selection of the Kellet AB consortium in 2015 was perceived as extremely scandalous in the industry, as solid companies with extensive experience in infrastructure construction were removed from the tender, including Austria’s Porr Bau, state-owned Trakcja PRKiI S.A. (Poland), Strabag Rail (Austria), Yapı Merkezi İnşaat (Turkey) and others.

Even then, it became clear that the Hungarian partner, the company Kelet-Út, had seriously exaggerated its role in the implementation of railway projects in Hungary. A simple check shows that Kelet-Út has completed works for only 12% of the Tárnok-Székesfehérvár railway modernisation project and not the whole project. However, the evaluation committee of the tender accepted the reference that Kelet-Út had built almost the whole section itself.

The situation is about to be reproduced with the new tender

for the section Iskar – Elin Pelin. He has attracted only two offers, one from companies related to Porr Bau, which are already working on the Sofia-Voluyak project, and the other is from the… Hungarian-Bulgarian Consortium “Iskar 2023” DZZD.

According to our media, in the new DZZD partners are the Bulgarian “United Group“, which has no experience in infrastructure construction, “RailRun Bulgaria“, which is backed by an Austrian lawyer Fiduciary and Hungary’s Homlok Fővállalkozó Kft., which is only known to have been registered in early 2023 with EUR 8,000 in capital. The Commercial Register shows that the former owner of “United Group” Iliyan Tasev is linked to Kelet-Út through the firm Bulgarian concrete elements.

So far, the Iskar 2023 consortium DZZD has not been allowed to continue the procedure due to non-compliance with the requirements and selection criteria, according to a protocol of the tender committee dated 04.09.2023.

However, the scheme may be stalling. Last week, the entire NRIC leadership was fired, without giving reasons, but no wonder this is related to in house the assignment of the GFF described above. In addition, the European Public Prosecutor’s Office is likely to intervene and investigate those responsible for this massive theft of European funds. Kovesi’s people have already started searches and arrests in connection with the project for modernization of the Kostenets-Septemvri railway section, which was won by a dubious Bulgarian-Romanian consortium and its implementation is also under the curve pear.

The European Anti-Fraud Office (OLAF) is certainly interested in the Sofia-Elin Pelin project, which will most likely impose a very large sanction on Bulgaria – the return of over BGN 100 million already paid out of the pocket of European taxpayers under this project.

Leading photo: Ivan Mirinski (left), railway line (illustrative photo)

***

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