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Bulgarian court rules to back regulator on gas grid capacity expansion contract

Bulgarian court rules to back regulator on gas grid capacity expansion contract

Sofia, July 17 - Neftegaz. RU. According to IBNA, Bulgaria’s Supreme Administrative Court has ruled against the appeal by the country’s gas grid operation Bulgartransgaz, which sought to overturn the competition regulator’s decision to re-instate Saudi Arabian Arkad Engineering as the winner in the tender to design and build the expansion of Bulgaria’s domestic gas infrastructure, needed in order for the country to handle the transiting gas from the Turkish Stream pipeline.

The court said, in a decision dated July 11, that Bulgartransgaz’s arguments were insufficient to rescind the Commission for Protection of Competition’s (CPC) ruling.

Earlier this month, the regulator blocked the company’s decision to drop Arkad Engineering as the contractor, in favour of the 2nd-placed bidder in the tender – a consortium including Italy’s Bonatti, the Italian subsidiary of German firm Max Streicher and Luxembourg-registered Completions Development Sàrl, which Bulgarian media linked to Russian pipe manufacturer TMK.

In June, Bulgartransgaz said that the Saudi firm did not provide all the paperwork required by law, despite several postponements, and sought changes to the draft contract, which would have breached the terms of the public tender.

In the meantime, the other candidate told Bulgartransgaz that it was prepared to offer a 31.1 % discount on the price it originally offered, which prompted the company to change its decision, Bulgartransgaz said.

This drew an official complaint from Arkad to the CPC, the regulatory body tasked with ruling on public procurement disputes, which said that Bulgartransgaz’s decision was unlawful because it did not meet the legal requirements necessary for the company to modify its tender award decision.

Bulgartransgaz also acted unlawfully in its unilateral imposition of a deadline to sign the contract and, simultaneously, conducting negotiations with the second-placed bidder before that deadline expired. Furthermore, the second-placed candidate should not have been allowed to change its price offer after the tender decision was made, CPC said.

Now that the court confirmed the regulator’s ruling, Bulgartransgaz will have to resume talks with Arkad, which is likely to further delay the start of construction.

Some analysts have already questioned whether Bulgaria will manage to complete the project on time, with deliveries through Turkish Stream at the border with Serbia slated to begin at the start of next year and reach full capacity by the end of 2020.

To read the article in Russian.

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