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Anti-trust body cancels Bulgartransgaz' decision to pick new builder of gas pipeline

Author Mario Tanev
Anti-trust body cancels Bulgartransgaz' decision to pick new builder of gas pipeline Denys Prykhodov/

SOFIA (Bulgaria), July 1 (SeeNews) - Bulgaria's competition authority said that it has cancelled as unlawful Bulgartransgaz' decision to disqualify the winner of a tender for construction of a pipeline for transit of gas from the border with Turkey to the border with Serbia, and pick a new contractor.

Bulgartransgaz did not have legal grounds to disqualify Saudi consortium Arkad, as the Bulgarian state-owned gas transmission network operator had set the deadline for submitting the necessary documents and signing the contract without considering the consortium's arguments, the Commission for Protection of Competition said in its decision published on Friday.

In May, Bulgartransgaz said it has disqualified the Arkad group and picked the second-ranked consortium comprising Italy's Consorzio Varna 1 and the Bulgarian branch of Luxembourg-registered Completions Development to build the 484 km-long pipeline. Bulgartransgaz said it switched its choice because Arkad had failed to present the required documents and sign the contract. 

Bulgartransgaz has also been unlawfully holding parallel talks with the second-ranked consortium, which subsequently offered a price discount for the construction of the pipeline, contradicting legal requirements, according to the competition regulator.

Arkad had proposed to build the pipeline for 1.29 billion euro ($1.46 billion) within 250 days, or for 1.10 billion euro within 615 days. The Consorzio Varna 1 - Completions Development consortium initially offered to build the pipeline for 2.41 billion euro and 1.60 billion euro, respectively, but subsequently lowered its offer for the 615 days time frame to 1.10 billion euro.

At the end of January, Bulgartransgaz successfully completed the binding Phase 3 of the economic test for the pipeline project - part of a larger project of Russia's Gazprom to build a string of its TurkStream pipeline for transit of gas to Europe from Turkey via Bulgaria, Serbia and Hungary.

The offshore section of the TurkStream pipeline stretching 930 km across the Black Sea from Russia to Turkey consists of two parallel strings with annual throughput capacity of 15.75 billion cubic metres of gas each. One string is intended for consumers in Turkey, while the second will carry gas to customers in Europe through Bulgaria.

($ = 0.8825 euro)