Around 60 million BGN (30.7 million euros) paid in advance for the construction of lot 5 of the Bulgarian Hemus highway was transferred to front companies and then exported from the country in bags and sacks, a Acting Interior Minister Boyko Rashkov said on November 5.
The day before, the arrest of more than 10 people suspected of being involved in the theft of money paid in advance for the construction of the highway had been announced.
At a press conference on November 5, Rashkov said the BGN 60 million was part of an advance payment of BGN 84 million for the construction of Lot 5. He explained that it was only a case of siphoning of funds from the construction of the highway.
Interior Ministry secretary Petar Todorov said the money was transferred to registered shell companies just days before the money was paid. Their owners were the subject of criminal records and signed powers of attorney in a cafe. Other people then withdrew the money in cash, taking BGN1mn at a time.
Plamen Tonchev, the head of the national security agency, said BGN 12 million was withdrawn in cash from one of the front companies in 23 operations between June and September. BGN12mn was withdrawn from another front company within six days at the end of 2020, BGN20mn between the end of October 2020 and mid-January 2021 from a third company and BGN13mn from a fourth.
All the shell companies had capital of BGN2 and were officially owned by people with no assets and with criminal records. They had neither equipment nor personnel. Some employees had been appointed a few days before the money transfers, then fired and assigned to another shell company. The companies had no other income than the sums transferred for the construction of the Hemus motorway section.
BGN84mn was paid in advance to the company Vodno Stroitelstvo-Blagoevgrad under a contract signed with the state company Avtomagistrali. Radio Free Europe reported that, according to its unofficial information, company owner Viktor Velev was among those arrested.
Todorov also said authorities had information on November 3 that participants in the scheme were preparing to destroy documents proving criminal activity, so the police decided to quickly arrest them.
The BGN84mn was paid by Avtomagistrali at a time when even the route of the section of Lot 5 had not been decided, said Acting Deputy Minister of Regional Development Ivan Shishkov. The government only decided to initiate the route selection procedure in recent days, but the money was paid in 2020.
Another section of the highway – Lot 4 – also did not have the proper documents to start construction. However, Avtomagistrali also paid for this section in advance, said the head of state construction supervision Vladi Kalinov.
At the end of October, the Interior Ministry, the National Revenue Agency and the State Financial Inspection Agency raided the offices of Avtomagistrali, seizing documents and computers related to the construction of the highway. Hemus.
On October 4, Rashkov accused former Prime Minister Boyko Borissov of being involved in the theft of money paid for the construction of the Hemus highway. Rashkov said the funds were transferred through a bank (still unnamed) whose owner owned co-ownership in companies with Borisov.
Local media suggested that Rashkov was referring to Tsvetelina Borislavova, owner and chairman of the board of the Bulgarian-American Credit Bank. Borislavova is said to have had a relationship with Borissov in the past. However, there has been no confirmation of these suggestions so far. Borissov denied Rashkov’s claims, threatening to take him to court.
Years of accusations
The construction of the Hemus highway – one of the top priorities of Borisov’s three governments – has been marred by controversy and accusations of corruption for years.
When completed, the highway will connect the capital Sofia with the city of Varna on the Black Sea for a distance of 420 km. Construction of the first section began in 1974, but work stalled in the last years of the communist era, resuming in the late 1990s. By the time Bulgaria joined the EU in 2007, only 170 km of motorway had been built. After that, progress continued to be uneven as several tenders for various sections were canceled either by the government or by the courts following objections from unsuccessful bidders.
Rumors of corruption in the construction process have also been circulating for a few years. Last January, Hristo Ivanov, one of the leaders of democratic Bulgaria, said his training would inform the European Commission of large-scale corruption linked to the construction of Hemus, estimated at 2.6 billion euros.
However, it was not until the first interim government headed by Prime Minister Stefan Yanev took office that action was taken; his government has launched extensive investigations into numerous cases of alleged corruption, including the construction of Hemus.
In June, Minister of Regional Development and Public Works Violeta Komitova revealed that internal procedures for awarding contracts worth millions had been used for the reinforcement of 84 landslide defenses and for construction from the Hemus highway.
His ministry said at the time that Avtomagistrali paid more than BGN 180 million in advance to contractors for work that had not advanced or had not started at all six months after its due date.
According to Komitova, the previous government led by Borisov obtained BGN 3.71 billion for the construction of the Hemus highway. Avtomagistrali has granted BGN976mn to 45-50 companies in advance for future construction works.
Some of the sections, for which advance payments have been made, need to be redesigned as they currently cross landslides, protected areas and areas with construction risks.
Komitova added in September that illegal construction work had been carried out on three sections of the Hemus highway because no building permits had been issued.