Bulgaria signs gas grid capacity expansion contract with Saudi firm Arkad

Bulgaria signs gas grid capacity expansion contract with Saudi firm Arkad

Bulgaria’s gas grid operator Bulgartransgaz said on September 18 that it has signed a contract 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, with Saudi Arabian Arkad Engineering.

The 1.1 billion euro contract envisions construction being carried out in two stages – a 308km section of the pipeline has to be completed in 250 days, and a further 166km within 615 days, which would put the project’s completion deadline at end-May 2021.

Bulgartransgaz said that the signing of the contract was made possible by the Supreme Administrative Court ruling on September 16 to dismiss the appeal against the public tender decision to award the contract. Bulgartransgaz picked Arkad as the contractor in April.

The company did not say, however, that it was its own decision to change the contractor, made in May, from Arkad to the second-placed consortium, arguing that it was unable to sign a contract because the Saudi firm did not provide all the paperwork required by law. It said that the other bidder offered a discount on the price it originally offered.

But Bulgaria’s Commission for Protection of Competition (CPC), the regulatory body tasked with ruling on public procurement disputes, ruled that the company’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 in its June decision.

CPC’s ruling was appealed at the Supreme Administrative Court, which ruled earlier this week to dismiss the challenge after one of the companies in the second-placed consortium withdrew its support for the case.

The episode has caused a three-month delay to the start of construction, raising the prospect that work on the expansion was likely to still be underway by the time deliveries through Turkish Stream at the border with Serbia were due to begin at the start of 2020, ramping up to full capacity by the end of next year./ibna

(The contract was signed with Prime Minister Boiko Borissov, second right, in attendance. Photo: Bulgartransgaz)