Varna Loses EUR 225,000 European Funding due to Irregularities in Public Procurement

Politics » BULGARIA IN EU | March 15, 2019, Friday // 14:47| Views: | Comments: 0
Bulgaria: Varna Loses EUR 225,000 European Funding due to Irregularities in Public Procurement

Nearly BGN 225 thousand will have to pay from its budget Municipality of Varna as a financial correction for violations in the organization of a public procurement contract for three road repairs. They are part of the second phase of its Integrated Urban Transport project. This is clear from the decision of the Administrative Court in Varna on a complaint of the municipality against the punishment imposed by the Ministry of Regional Development and Public Works. It is the Managing Authority under the Operational Program "Regions in Growth", which finances the project, worth almost 39 million BGN, reports Dnevnik.

Performers of the renovations on the boulevards "Primorski", "Tsar Osvoboditel" and "Parvi May" are the company "Ingstroyengineering" and the sole trader "Stanka Vasileva". They are part of the companies that worked on all the infrastructure projects of the local administration during the three terms of office of the former mayor of Kiril Yordanov. On the basis of new public procurement and framework contracts, the same companies continued to operate without competition during the tenure of the current Varna mayor Ivan Portnich.

The repairs commissioned to Ingstroyengineering and Stanka Vasileva have a total value of about BGN 6.4 million. The two companies have won the tender with offers, defined by the local administration in Varna as "economically most advantageous". However, in the follow-up audit, following an alert, the managing authority (the Ministry of Regional Development and Public Works) found that the attached award criteria were unlawful, which also led to unequal treatment of bidders and, as a result, to unlawful contractor selection.

Because of these irregularities, the financial correction imposed by the Ministry of Regional Development and Public Works amounts to 10% of the value of each of the three lots of public procurement, or a total of BGN 225,000. These funds will be sent from the local budget and will not be refunded on subsequent payments under the grant agreement under the Integrated Urban Transport project.

In addition, Varna municipality will also have to pay nearly BGN 6,000 for lawyers' fees incurred by the Ministry of Regional Development and Public Works in the course of the administrative procedure.

The decision is subject to a cassation appeal before the Supreme Administrative Court.

The second phase of the project "Integrated Urban Transport in Varna" should be completed by January 19, 2021. It envisages the repair of several short road sections, 50 more intersections in Varna to the non-working displays for real-time information at the bus stops equipped with video cameras to provide a "green wave" and equipped with 25 "intelligent" walkways that light up when passing through them.

All this was promoted as an "upgrading" of the first phase of the project - the most costly failure of the local administration. It was worth 115 million leva and had to raise to a completely new quality level urban transport in Varna. But because of the negligence in organized public procurement and the contracts concluded on them, this did not happen.

The most expensive component of the first project stage - the so-called BRT corridor (fast bus corridor) does not function four years after the formal completion of the first stage of the project. Partial or totally inoperative are almost all systems for electronic ticket sales as well as real-time traffic information for buses. There are no information about their names, where they are located, which lines of the city transport service, what their route is, and so on. The information provided through the dedicated site and the mobile travel planning application in the city is inaccurate and outdated.

The financial correction imposed on Varna Municipality in connection with the implementation of the second phase of the Integrated Urban Transport project is not a surprise. At the beginning of December 2016 Deputy Minister of Regional Development and Public Works Denitsa Nikolova sent to the local administration a letter of sharp tone. It received remarks about ineligible omissions and numerous violations in the preparation of the documentation for financing the second phase of the project.

Nikolova's letter sent at that time ended with the explicit warning that if the negligence in the preparation of the project documents were allowed again, its funding could fail.

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