site.btaBorissov's Crony Companies Misused Millions in Public Money Paid for Road Construction, Repairs - Interior Minister

The Road Infrastructure Agency had paid to the state-owned Avtomagistrali EAD company some BGN 400 million for road maintenance and construction even before a spatial development plan for the projects was prepared, Bulgarian Inerior Minister Boyko Rashkov told the media Thursday, making public the findings of a year-long probe into misuse of funds spent by the Boyko Borissov Government on motorway and road construction and repair. 

Rashkov also said that transfers that were supposed to be financing motorway construction and road repair ended up in accounts abroad or went for purchase of luxury estate.

In a notorious scheme involving in-house contracts, Avtomagistrali subcontracted another company for works on Lot 8 of the Hemus Motorway and advanced it BGN 84 million. The subcontractor then invested the money in a BGN 27 million property now under construction in central Sofia, while no work has been done by this company on the Hemus Motorway, said the Minister.

In in-house procurement, the contracting authority is not required to invite competitive bids in order to award a contract because it provides itself the supplies, services or works that it requires without using external resources. In-house procurement contracts may also be performed by a company or another separate legal entity established by the contracting authority.

Another subcontractor was paid BGN 14 million for work on the Hemus Motorway and transferred part of the money to a different company, which is building a luxury resort some 100 km west of Sofia. The latter company nominally borrowed the money, but operational information shows that the two companies are controlled by the same person.

Of the same BGN 14 million, BGN 900,000 were paid as dividends into the company owners' bank accounts. 

BGN 12 million for the same Lot 8 went to another company that credited BGN 8.5 million to the personal account of an individual under some contract, and several months later the contract was terminated and the company was reorganized. 

Dividends or fees under contracts for service, paid to individuals from State funding for motorway construction, were wired to bank accounts in the UAE, said Rashkov. 

In another striking example, money was paid to some 20 companies that were not contracted to provide construction services but were close to the Borissov Government. The companies withdrew the money in cash from the banks, using indigents as straw recipients. 

The Interior Minister said that all these cases were possible with the blessing of Boyko Borisov and his Regional Development Minister Petya Avramova.

Rashkov said it was too early to name names, but the time would come soon.

He mentioned the findings of the probe on Wednesday at a news conference that Prime Minister Kiril Petkov and several of his ministers held after it transpired that one of the partners in the government coalition, There Is Such a People, was pulling out its Cabinet members and the coalition would no longer have a majority in Parliament.

It transpired at the news conference that the Finance Minister had rejected demands by Regional Development Minister Grozdan Karadjov (of There Is Such a People) for an increase of his Ministry's budget by a substantial BGN 3.6 billion for outstanding payments to road construction companies.