November 13 (SeeNews) - Bulgaria's competition authority said it has cancelled a decision of state-owned railway company BDZ Passengers to open a 675 million levs ($393.7 million/345.1 million euro) tender for supply and maintenance of 42 railcars over violation of public procurement rules.
The draft contract proposed by BDZ Passengers includes a cancellation clause, as well as a clause which envisages the possibility to make unspecified changes to the final contract, both of which contradict the Public Procurement Act, the Commission for Protection of Competition said in its ruling issued on Monday in relation to a complaint filed by Germany's Siemens Mobility.
The cancellation clause is related to the fact that BDZ Passengers' contract with the state for providing railway passenger services will expire at the end of 2024. The contract will only remain valid afterwards if BDZ Passengers signs a new contract with the state.
Under its current contract with the state, BDZ Passengers receives an annual payment of 35 million levs, which it intends to use to finance the purchase of new railcars, which has an estimated value of 450 million levs.
The draft railcars supply contract envisages annual payments of at least 35 million levs, and payment of the total sum within no more than 10 years. This means that BDZ Passengers will have likely paid no more than half of the contract's value by 2024. At the same time, the selected supplier has 45 months to deliver the railcars, i.e. all railcars will be delivered by 2024.
Regarding the other clause, the competition authority states that, although the Public Procurement Act envisages the option to make changes to the terms of the contract, those changes must be explicitly defined, which BDZ Passengers has failed to do.
The regulator's decision can be challenged before the Supreme Administrative Court within 14 days since receiving notification.
BDZ Passengers launched the tender in mid-August and set October 12 as deadline for submitting offers. Siemens Mobility filed its complaint on September 10 and proceedings were launched by the regulator on September 12.
Besides Siemens Mobility, China's CRRC Qingdao Sifang has also filed a complaint against the tender.
(1 euro = 1.95583 levs)