Information newsletter
Issue 8(20), August 2005

State Deals - Private Interests and Transparency
Alexander Kashumov, AIP

Ten days ago, the new Minister of Regional Development and Public Works announced that he was going to declassify the concession contract for the construction of the "Trakia" Highway on 1 September. The extent to which society will find out about the documents related to this scandalous concession is yet questionable. The former minister's refusal defined the case as an emblematic example of the former government's affinity for "dark deals." Interestingly, however, the other ministries that inherited state deals with high costs, low transparency, and questionable public benefit did not follow this minister's example.

There are many examples of these inherited contracts. In 2001, the Minister of Finance, Milen Velchev, secretly contracted the reforms of the Bulgarian Customs Services for GBP 8,132,000 to the British Consultancy Crown Agents.¹ Thanks to the classification of the document, no one could figure out the purpose of the contract or how it would be achieved. In 2002, over 30,000 Microsoft software packages were contracted by the Minister of State Administration, Dimitar Kalchev, for 13,650,000 BGL (around 7 mill. Euro).² Rumour has it that thousands of the software packages from this contract remained unused since most of the administration's PC's were bought with software already installed. Hence, all three deals (with Microsoft Corporations, with Crown Agents, and for the construction of "Trakia" Highway) are characterized by a violation of the tender selection procedure for contracting the deals, the persistent refusal of the administration to provide access to the documents, and doubtful efficiency of the contractors.

Undoubtedly, however, the most expensive of the former government's projects was the construction of a nuclear power plant in Belene. Almost as impressive as the price tag, which will reach into the billions, is the darkness which surrounds all activities related to this project.

It all started on 29 April 2004 when the Council of Ministers came to a decision to construct the NPP in Belene. That decision was so diligently kept from public eye that the Ministry of Energy's Head of Administration denied writing that it had been made. However, after it came out that a decision had been actually made and the decision was appealed in court, the state invented another trick. The government's attitude of unaccountability to its citizens and disrespect for the rule of law could be summarized by the phrase: "What you see is not what you see!" The decision taken was not exactly a decision for the construction of a nuclear power plant. It only seemed like it. In fact, there were two types of decisions-"in general" and "on the merits," no matter that such a distinction was stipulated neither by Article 45 of the Law on Safe Exploitation of Nuclear Energy, nor by the legal theory interpretation. The Five-member Panel of the Supreme Administrative Court put an end to this artifice with a ruling on 17 January 2005. Nevertheless, the government remained obstinate and made a second decision on the same issue in April 2005. Their hope to avoid court oversight proved to be unsuccessful, however. The appeals against the two decisions-that of April 2004 and April 2005--will be considered by the court in November 2005.

Three other cases are to be considered by the court in the autumn. The three are appealing against the decision on the environmental impact assessment and the two decisions for the construction of the nuclear power plant. Several other cases for access to information are ongoing in court.

The following information related to the construction of the nuclear power plant has been denied:
o the conflict of interest declarations of the experts working on the environmental impact assessment;
o the secret statute No. 45 passed by the Council of Ministers on 30 December1988, which is probably related to the declining productivity of the Belene region;
o the technical and economic analysis, which must be developed before the decision is made for construction of a nuclear power plant, and which should start the public debate that precedes the decision.

The unanimity of the institutions in refusing this information is remarkable. Access to the declarations has been denied by the Ministry of Environment and Waters (MOEW), to the statute-by the government, and to the technical-economic analysis-by the Ministry of Energy and Energy Resources (MEER). An April decision of the Sofia City Court repealed the refusal of MOEW as unlawful. Decisions on the other cases are pending.

In the course of the battle for access to information related to the construction of NPP Belene, it came out that of the three legally required analyses that should have preceded the April 2004 decision about the construction, not one of them had been performed. For the April 2005 decision, it became clear that no analysis had been developed about the radioactive wastes and wasted nuclear fuel or about how they would be managed. No one could evaluate the quality of the technical-economic analyses that were performed since, as was already mentioned, access to considerable parts of the document was denied. In such a deficit of documents, among other deficits, the decision for the construction of nothing less than a nuclear power plant seems frightening.

Interestingly, no matter how much money the state pays for its deals, some private interests have always been more important than the public access to information. It was restricted either by a state secret exemption (Crown Agents case), or an official secret ("Trakia" highway), or the protection of third party's interests-the private company (Microsoft case and the technical-economic analysis for the construction of the NPP Belene). The most bizarre of all these cases is probably the refusal of MEER. They grounded their decision in the fact that the analysis was property of the state owned National Electric Company, which did not give its consent for provision of the information.

I ask the government, What about the millions of "third parties" who do not get state money under these deals? They pay their taxes but since they have no private interests, they apparently have no rights.

1. Quoted from reference signed by Minister Velchev and addressed to Nikolay Marekov from AIP, their reference No. APIA- 2/March 14, 2002.
2.The information is quoted from Letter by the Minister of State Administration to AIP, their reference No. 03 07-11/ March 19, 2003.