President Plevneliev for FT: Our Oligarchs Are Addicted to State Money

Politics » DOMESTIC | August 12, 2014, Tuesday // 10:51| Views: | Comments: 2
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Bulgaria: President Plevneliev for FT: Our Oligarchs Are Addicted to State Money Bulgarian President Rosen Plevneliev. Photo by BGNES.

Bulgaria’s President Rosen Plevneliev has leveled strong criticism at the country’s politicians and oligarchs for relying too heavily on public funds, the FT reports.

“Our oligarchs are addicted to state money,” said President Rosen Plevneliev in an interview with the Financial Times. “As president, I feel disappointed that many (procurement) decisions, especially on big infrastructure projects, have been taken without enough transparency and behind closed doors,” he said.

The European Commission has launched an investigation to find whether Bulgaria breached EU competition rules in awarding contracts to local and Russian construction companies in relation to South Stream, FT explains.

Bulgaria has also been shaken by a recent run on Corporate Commercial Bank which has been shut down and had its deposits frozen. The country has EUR 7M in EU funding blocked because of corrupt practices involving politicians and local businessmen, the online edition notes.

“People want to see more transparency in all these sectors?.?.?.?That is why the caretaker government will make it a priority to draft new legislation implementing e-government for the incoming administration to pass,” he added.

Plevneliev appeared to be taking aim at a deal in which the state-owned Bulgarian Energy Holding (BEH) signed up several Sofia-based private contractors to build the Bulgarian section of the pipeline, which would carry Russian natural gas across the Black Sea to Austria. The project has faced criticism over the EUR 3.5B price for the Bulgarian leg, which has been said to exceed almost three times what it would cost to build in central Europe.

Last week the Russian Stroytransgaz company controlled by Gennady Timchenko, who is on the US sanctions list, pulled out of a joint venture with BEH on South Stream, stirring fresh controversy. The company was replaced by a Gazprom subsidiary without any tender for the contract, the FT reminds.

Stroytransgaz has said the decision to leave South Stream was a “bilateral” one adding that all work to be performed would be transferred to the new participant on commercial terms, and therefore no losses were expected for the company.

“We will keep the South Stream project frozen as long as the EU is making its checks under the infringement procedure and we will start construction only when the commission gives the green light, however long it takes,” President Plevneliev said. Brussels has launched the probe in June, just as the Bulgarian contractors were preparing to begin construction.

Corporate Commercial Bank was shut down following a run on deposits prompted by a dispute between Tsvetan Vassilev, the majority shareholder, and Delyan Peevski, a controversial media mogul and one of the bank’s biggest borrowers. Both men have ties with contractors selected for South Stream, Financial Times wrote on Monday.

The bank will remain closed at least until October while international audit firms probe its balance sheet, Plevneliev said.

“The central bank and the prosecutor’s office will both have international support to find out everything they need to know?.?.?.?including checking these creative chains of offshore companies (used by Bulgarian businesses) from beginning to end,” he said.

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Tags: Rosen Plevneliev, oligarchs, South stream, Stroytransgaz, Corporate Commercial Bank, Tsvetan Vasilev, Delyan Peevski All Are Welcome! Join Now!
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» To the forumComments (2)
Ms. Dove - 13 Aug 2014 // 16:04:27

I would use the word 'destructive' not 'creative' to descibe the offshore companies which have not been scrupulosly investigated thus leading to 'avarice' dominating the scene. Charles Dickens wrote much on the suject of avarice to make the public aware of the oligarchs of his time. Let's see if Bulgaria is ready, wiiling and able to turn things around- gradually - of course.

Seedy - 13 Aug 2014 // 09:58:14

"Addicted to State money", Rosen? Surely you didn't think they were going to WORK for a few leva a week when they can just steal as much as they feel like? ;)

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