Audit Finds No Flaws in Public Procurement Procedures at Road Infrastructure Fund

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Audit Finds No Flaws in Public Procurement Procedures at Road Infrastructure Fund

The Finance Ministry officially announced on Wednesday that its inspectorate had audited public procurement procedures at the National Road Infrastructure Fund (NRIF). The auditors looked into five public procurement procedures for the period between September 1, 2006, and January 31, 2008, and found no flaws, their report shows.

The audit was prompted by allegations of a conflict of interests in the award of public procurement contracts by NRIF to a company run by the brother of the former NRIF executive director, Vesselin Georgiev. Georgiev resigned in the wake of the disclosures, but the alleged conflict of interests, coupled with the arrest of two senior NRIF officers on bribery charges, resulted in a temporary suspension of EU funding for Bulgarian road infrastructure projects. The European Commission has said it is waiting for the auditors' report to provide conclusive information.

The auditors found that none of the five procedures was challenged as provided for by the Public Procurement Act.

Contracts worth nearly 26,423,000 leva were made with Binder, the company of Georgiev's brother, during the reference period. NRIF said nearly 3,929,000 leva had been paid so far.

The audit found that in four out of the five public procurement procedures assigned at the Regional Road Department of Sliven, Binder was the only tenderer. With no other tenderers and different tenders, no comparative price analysis can be made, the auditors said.

Based on the audit conclusions, the Finance Ministry's inspectorate suggested that to improve the award of public procurement contracts, NRIF should look out for clauses which could presumably give a competitor an advantage, and it should seek broader participation in public procurement procedures.

"This will promote real competition and will help ensure better conditions for the contracting authority, respectively the State," the Finance Ministry said.

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