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From Bulgaria

06.08.2014 16:25

Bulgaria Approved the Construction of South Stream on July 31

Signed by resigned regional development minister days before the announcement of a caretaker government, the permit does not fail to cast a shadow over Bulgaria

AUTHOR: Lyudmila Zlateva

© south-stream.info

Bulgaria’s Ministry of Regional Development has issued a construction permit to Gazprom – Bulgarian Energy Holding (BEH) joint venture “South Stream Bulgaria” AD for the receiving terminal, the compressor station and adjacent road of the planned gas pipeline which will enter the country south of the city of Varna. The permit was signed by now ex-minister Desislava Terzieva days before President Rosen Plevneliev announced a caretaker government and a week after rumours about the planned approval of a loan from Gazprom to BEH circulated in Bulgarian media.

The construction permit does not fail to cast a shadow over Bulgaria's efforts to convince the European Commission that South Stream would remain suspended until all discrepancies with the EU legislation are remedied.

The permit allows construction in Bulgaria to kick off even if an appeal against it is registered within the legal 14-day period after the decision has been published in the State Gazette. This decision is justified with the presumption that otherwise "important national and public interests" would be hurt. In the motives for the decision the minister cites the Bulgarian - Russian intergovernmental agreement of 2008 and the expected positive economic and energy effects of the project's implementation, for Bulgaria, the region and Europe.

The text however does not mention the name of the construction contractor. A consortium between Russia’s Stroytransgaz and five Bulgarian companies said to be related to now bankrupt Corporate Commercial Bank, won the much disputed tender procedure for the construction of South Stream in Bulgaria. The tender passed without complying with Bulgaria's Public Procurement Act, thus coming under European scrutiny. Eventually, this resulted in an infringement procedure against Bulgaria. In recent days however, the U.S.-sanctioned Stroytransgaz announced its withdrawal in favour of Gazprom subsidiary Centrgaz in order to avoid stalling the project.