Caretaker Economy Minister Found Multiple Violations during Inspection of Dams

Politics » DOMESTIC | June 15, 2021, Tuesday // 10:32
Bulgaria: Caretaker Economy Minister Found Multiple Violations during Inspection of Dams

Caretaker Economy Minister Kiril Petkov told reporters on Monday he would seek an explanation from the State Consolidation Company (SCC) why three dams were still not in operation six months after repairs. He talked of mismanagement and inflated prices after inspecting three of the ten dams whose repairs have been completed.

During an inspection, Petkov found that the dams - Pazar Dere in Lovech Region (Northern Bulgaria) and Zlati Voivoda 3 and 4,
both in Sliven Region (Southeastern Bulgaria) - were empty and overgrown with grass. The Montagi EAD state-owned company
transferred them to SCC at the end of 2020, which was supposed to turn them over to the State Dam Management and Stewardship Company. It was set up in 2019 as the owner responsible for the management, security and minor maintenance of potentially dangerous dams, while SCC is responsible for repairs.

Although the repairs of the three dams have been completed and paid for, they cannot be filled with water and used for irrigation and other purposes since the protocols of delivery have not been completed, said Petkov, adding that this is an instance of mismanagement.

Taking a question, the Economy Minister said that since the State Dam Management and Stewardship Company cannot use the
reservoirs, their sluices had to be opened after each heavy rainfall because the dams are still considered to be under repairs and cannot be filled with water.

Regarding Montagi EAD, Petkov said between six and eight companies hold over 82 per cent of the contracts for repairs of
more than 100 dams.

More than 400 small dams are due for repair since the Boyko Borissov government considered them a risk to the population
after heavy floods in 2018. At the time, the government allocated 500 million leva to the Economy Ministry for dam repairs. SCC's capital was increased by that amount, and the company signed with its subsidiary Montagi at least 266 contracts worth 631 million leva, with the remaining 130 million leva borrowed from the Bulgarian Development Bank. Montagi made advance payments of several million leva each to subcontractors through a new company, Montagi Sofia.

Petkov said on Saturday that in 2018 Montagi had outstanding debts to the National Revenue Agency and creditors, and while
its accounts were frozen, it made payments through its subsidiary, which he called unacceptable, given the large volume of construction work.

Costly repairs
Furthermore, the Economy Minister will ask the Public Financial Inspection Agency to look into overpricing of materials and
construction. All three dams were repaired by the same company at what he said were inflated price. A cubic metre of concrete
cost between 214 and 219 leva, double the market price, and at 1.16 leva per tonne-kilometre, soil transport costs were five
times the market price, he said.
The repairs cost about 5 million leva: 2,350,000 leva for the Pazar Dere Dam, 1,913,000 leva for Zlati Voivoda 3 and 547,000
leva for Zlati Voivoda 4.

The state-owned companies have their managing and supervisory boards, which cannot be dismissed before a competition for new members is held, Petkov said on Monday, and pledged that the caretaker government would work every day to make those changes.

Inspecting the Pazar Dere Dam, Petkov Saturday posted a video which showed a plastic bottle attached to the water level
gauging equipment. He commented: "I expect the equipment to look  better than this when the State spends over 2 million leva."

Petkov's predecessor, Lachezar Borisov, who also visited the site, called those claims "a grave manipulation of the public"
in the run-up to the July 11 parliamentary elections. He said the dam had been designated dangerous in 2013 because it
inundated the road between Sofia and Varna. He claimed the water  had been drained shortly before Petkov's inspection since the
dam was full on May 31. The former economy minister also said at least 600 companies were involved, not six as Petkov claimed,
and that the price of concrete included its transport and placing.

Acting on its own initiative, the Supreme Cassation Prosecution Office Monday asked the Economy Minister to make available the
information on dam repairs financed by SCC


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