Bulgaria competition watchdog re-instates Saudi firm Arkad as gas grid capacity expansion contractor

Bulgaria competition watchdog re-instates Saudi firm Arkad as gas grid capacity expansion contractor

Bulgaria’s Commission for Protection of Competition (CPC) has ruled 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.

Last month, Bulgaria’s gas grid operator Bulgartransgaz changed its decision and dropped Arkad Engineering as the contractor, in favour of the second-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.

Bulgartransgaz said at the time 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 per cent discount on the price it originally offered, which prompted the company to change its decision, which drew an official complaint from Arkad to the CPC.

CPC, the regulatory body tasked with ruling on public procurement disputes, 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.

CPC said that part of Arkad’s complaint, in which it argued that its rival consortium did not meet tender criteria, was not subject to a regulatory ruling.

The regulator’s ruling can be appealed at the Supreme Administrative Court in 14 days, CPC said.

Such an appeal would 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./ibna