bne IntelliNews – Bulgaria reveals how millions of euros have been siphoned off from Hemus’ motorway construction

Around 60 million BGN (30.7 million euros) paid in advance for the construction of Lot 5 of the Bulgarian Hemus Highway were handed over to letterbox companies and then exported out of the country in sacks and sacks, Interior Minister Boyko Rashkov said on November 5th.

A day earlier, the arrest of more than 10 people was announced, suspected of stealing prepaid funds for the construction of the highway.

At a press conference on November 5, Rashkov said that the BGN 60 million was part of an advance payment of BGN 84 million for the construction of Lot 5.

According to Interior Minister Petar Todorov, the money was sent to letterbox companies that were registered just days before the payout. Their owners were the subject of criminal files and signed powers of attorney in a café. Other people then withdrew the money in cash and took BGN 1 million each.

Plamen Tonchev, the head of the national security agency, said that between June and September, BGN 12 million in cash were withdrawn in cash by one of the letterbox companies in 23 operations. At the end of 2020, BGN 12 million was withdrawn within six days from another shell company, between the end of October 2020 and mid-January 2021, BGN 20 million from a third company and BGN 13 million from a fourth.

All the letterbox companies had a capital of BGN 2 and were officially owned by people with no assets and criminal records. They had no equipment or staff. Some employees had been appointed and then fired and transferred to another mailbox company a few days before the money was transferred. Apart from the amounts transferred for the construction of the Hemus motorway section, the companies had no income.

BGN 84 million was paid in advance to Vodno Stroitelstvo-Blagoevgrad under a contract signed with the state company Avtomagistrali. Radio Free Europe reported that, according to unofficial information, the company owner Viktor Velev was among those arrested.

Todorov also said that on November 3, authorities had information that participants in the program were preparing to destroy documents proving the criminal activity, so the police decided to arrest them quickly.

The BGN 84 million was paid by Avtomagistrali at a time when the route of section lot 5 had not even been determined, said Deputy Regional Development Minister Ivan Shishkov. The government decided to start the route selection process only in the past few days, but the money was paid out in 2020.

Another section of the motorway – lot 4 – also did not have the documents required to start construction. Avtomagistrali paid in advance for this section, too, said the head of the state building supervision Vladi Kalinov.

In late October, the Ministry of the Interior, the National Treasury and the State Financial Inspection Agency raided Avtomagistrali offices and confiscated documents and computers related to the construction of the Hemus Highway.

On October 4, Rashkov accused former Prime Minister Boyko Borissov of stealing funds for the construction of the Hemus Highway. Rashkov said the funds were transferred through a bank (as yet unnamed) whose owners, along with Borissov, had stakes in companies.

Local media has hinted that Rashkov was referring to Tsvetelina Borislavova, owner and chairman of the Bulgarian-American Credit Bank. Borislavova is said to have been in a relationship with Borissov in the past. However, there has not yet been any confirmation of these proposals. Borissov has denied Rashkov’s claims and threatens to sue him.

Years of allegations

The construction of the Hemus motorway – one of the top priorities of the three Borisov governments – has been overshadowed by controversy and allegations of corruption for years.

After completion, the motorway will connect the capital Sofia with the Black Sea city of Varna, 420 km away. Construction on the first section began as early as 1974, but work stalled in the last few years of the communist era and resumed in the late 1990s. When Bulgaria joined the EU in 2007, only 170 km of motorways had been built. Thereafter, progress remained patchy as several tenders for different routes were canceled by either the government or the courts due to appeals from unsuccessful bidders.

For some years now, rumors of corruption in the construction process have also been circulating. Back in January, Hristo Ivanov, one of the leaders of democratic Bulgaria, said his formation would inform the European Commission about the massive corruption related to the construction of Hemus, which is estimated at 2.6 billion euros.

But it was not until the first transitional government took office under Prime Minister Stefan Yanev that action was taken; His government launched an in-depth investigation into numerous cases of suspected corruption, including the construction of Hemus.

In June, the Minister for Regional Development and Public Works, Violeta Komitova, announced that internal procedures had been used to award contracts worth millions to reinforce 84 landslide protection measures and to build the Hemus motorway.

At the time, your ministry announced that Avtomagistrali had sold more than 180 million euros.

According to Komitova, the previous government under Borissov secured BGN 3.71 billion for the construction of the Hemus highway. Avtomagistrali granted 45-50 companies BGN 976 million in advance for future construction works.

Some of the prepaid sections need redesign as they are currently going through landslides, protected areas and areas at risk of construction.

Komitova added in September that illegal construction work had been carried out on three sections of the Hemus motorway as no building permits had been issued.

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