The Sofia City Prosecutor's Office has started a procedure against two former CEOs of the Bulgarian National Electric Company NEK over the controversial project for a second Bulgarian nuclear power plant in Belene.

The two former CEOs of NEK Lyubomir Velkov and Mardik Papazyan are to be charged for incurring losses worth EUR 200 M under the contract for the construction of the Belene NPP between NEK and the Russian state company Atomstroyexport.

The prosecutor's procedure is started about a month after the center-right government of Prime Minister Boyko Borisov and the GERB party decided to terminate the project for the construction of the Belene plant, a joint project with Russia, claiming that it is economically unfeasible for Bulgaria.

The Sofia City Prosecutor's Office announced Wednesday night that the charges against Velkov and Papazyan are based on the report of the Bulgarian State Agency for Financial Inspection, which was announced by PM Borisov on Monday, and was said to have found gross violations in the agreements between Bulgaria's government and the Russian side for the construction of what was supposed to be a 2000 MW NPP.

The report of the state financial inspectorate has concluded that there had been violations in the public procurement tender for the construction of the Belene NPP, including the signing of the former Stanishev Cabinet of a contract without holding a tender for some of the business activities for Belene.

Sofia Prosecutor told the bTV channel that in spite of the existing practice of staging investigations against unknown perpetrators until any guilt is established, in the case of the former NEK CEOs, the investigation will be personally focused on them.

The case will be handled by the Prosecutor's special unit for high level corruption, and will be a priority of the Prosecutor's Office, he said.

The Report of the State Agency for Financial Inspection has found that the violations in the contracts for the Belene plant were committed mostly during the term in office of the Stanishev Cabinet of the three-way coalition between 2005 and 2009, which is when Velkov and Papazyan were CEOs of Bulgaria's National Electric Company NEK.

The construction of the Belene Nuclear Power Plant would have cost EUR 10.35 B in the best case scenario, according to the estimates of Bulgarian government's consultant for the project, the HSBC bank.

The 2006 contract that Bulgaria's Stanishev Cabinet signed with Atomstroyexport for the construction of the Belene NPP was for EUR 3.997 B . Subsequently, however, it became clear that the final price would be higher, which led to years of haggling and seeking of "strategic investors" by the Bulgarian government of Borisov.

At one point Rosatom put the price of the construction of the 2000 MW plant at EUR 6.3 B, while Bulgaria insisted on EUR 5 B. The Borisov Cabinet terminated the project regardless of the Russian compensation claims in March 2012, arguing that it was "economically unfeasible" for Bulgaria.

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