A tender fraud involving a firm owned by Ivo Prokopiev may result in State losses of BGN 50 mln

A company owned by the businessman Ivo Prokopiev has been unlawfully admitted to take part in the public procurement tender for the supply of limestone for desulfurisation at the Maritsa-Iztok 2 thermoelectric power plant (TPP), sources familiar with the procedure told Klassa. The company in question is Zavodski Stroezhi PLC of Pernik, 100% owned by Sofstroy PLC, according to data from the Commercial Register, and the latter is owned by Alfa Finance Holding, owned by Ivo Prokopiev. The public procurement order is for 2.5 million tons of limestone, and the damage caused to the State could be roughly BGN 50 mln, taking into account transport costs as well.

In this case, Zavodski Stroezhi does not meet the mandatory condition for possessing a concession for limestone and was allowed to participate in the tender for obscure reasons. The company does not have any experience in supplying this kind of material since it does not trade in limestone. The need for the quarry to be near the respective enterprise should not be neglected either. Control and prices cannot be guaranteed in the absence of a quarry, experts say.

It is known that, by law, companies with State participation are required to assign a public procurement order after collecting offers which meet the requirements set by them for supplies and services. This has not been done in this case.

A check with the National Concession Register with the Council of Ministers shows that Zavodski Stroezhi PLC – Pernik has a dolomite quarry. This means that since the company does not have a limestone pit, it should be removed from the public procurement tender. Moreover, the dolomite quarry in question is 300 km away from Maritsa-Iztok 2 TPP.

Experts warn that dolomite cannot be used for desulfurisation. If this is done, Maritsa-Iztok 2 will emit tons of harmful emissions and the installations might be damaged. It would be interesting to know what documents Zavodski Stroezhi has presented at the tender? It may have produced fake documents. Or has the committee decided to let the company take part in the bidding for some other reason? Since Zavodski Stroezhi had been allowed to take part in the tender, it should have submitted the following documents:
1. A concession contract for a limestone deposit - a certified copy.
2. A geological report submitted to the Ministry of Environment and Water – a certified copy.
3. An analysis certificate of the chemical and physical parameters of the offered limestone (96% CaCO3).

According to industry experts, since Zavodski Stroezhi PLC – Pernik does not have a limestone deposit, there is no way it could have submitted the above three documents.

Eight companies participated in the tender, two of them – Kaolin PLC and Zavodski Stroezhi PLC - owned by Alfa Finance Holding. The results from the tender are to be announced on Wednesday. However, some of the bidders have already expressed serious concerns that things have been set up and the winner – predetermined. Klassa received information that Zavodski Stroezhi will be the tender winner and pressure has been probably exerted by influential people close to Ivo Prokopiev. Thus, instead of being immediately disqualified as not eligible, the company will actually be selected, contrary to the bidding procedure and the law.