OLAF Uncovers Bulgaria Power Plant Competition Irregularities

Finance | March 5, 2010, Friday // 14:49|  views

The European anti-fraud office, OLAF, has discovered irregularities in documents submitted in a competitive tender to supply anti-pollution equipment for Bulgaria's Maritsa East 2 power plant. Photo by BGNES

The European anti-fraud office OLAF has revealed errors and shortcomings in tender documents submitted to Maritsa East 2, the largest power plant in Bulgaria.

The competitive tender announced by Maritsa Iztok 2 was for the construction of Flue Desulfurization plants at units 5 and 6 of the power complex, as a measure for reducing pollution.

 A check made by OLAF investigators a week ago revealed that certain submitted project documents did not include the required signatures, in breach of requirements.

They also discovered documents that were not fully dated, and therefore inadmissible, along with other unspecified inaccuracies.

The OLAF press office announced on Friday that it has a good cooperative relationship with the Bulgarian authorities, and will do everything possible to complete the investigation as soon as possible in accordance with operational procedures.

However, they declined to comment of the Maritsa East 2 case, on the grounds that the investigation is still underway, as did the power company, stating that the information is confidential.

On Friday, February 26, one day after the inspection ended, Maritsa East 2 issued a press release stating that OLAF had discovered no violations of procedure, and that the tender had been conducted in full conformity with the rules of the European Bank for Reconstruction and Development (EBRD).

The statement also claimed that all actions by the evaluation committee were in accordance with EBRD requirements, and added that the Bulgarian Ministry of Environment and Water had also approved the selection.

OLAF has still to analyze whether the evaluation committee misled EBRD and the Ministry of Economy.

The project has now been delayed by some 20 months. Because of the commitment of the EU to reduce air pollution, there is a risk that that they will insist on the closure of the two units at the plant. This in turn could mean the loss of EU pre-accession funding of up to EUR 36 M, with the Bulgarian government having to step in with finance.

Nona Karadzhova, the Environment Minister, had earlier said that there was no shortcoming on the Bulgarian side relating to this tender. She has, however, declined to comment on the possibility of the loss of external funding, saying only that any guilt will be uncovered, once the OLAF investigation has been completed.

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Tags: Maritsa East 2, OLAF, competitive tender, EBRD, Ministry of Economy, Environment Minister, Nona Karadzhova, EU funding


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