site.btaFinance Ministry Denies "Media Allegations" that Public Procurement Act was Amended under Outside Influence

Bulgaria's Finance Ministry on Wednesday issued a press release denying what it described as "media allegations" that the Ministry had drafted amendments to the Public Procurement Act (PPA) "under outside influence".

The reference was to a report released by the investigations and data journalism project BIRD.bg earlier this month, according to which the Ministry reckoned with an opinion submitted by Intelligent Traffic Systems (ITS) owner and Managing Director Stanislava Arnaudova and scrapped a draft amendment to the PPA that would have extended the application of the law to the conclusion of contracts between the Road Infrastructure Agency (RIA) and electronic road tolling service providers. In this way, such providers continue to be selected by the RIA Management Board without a public procurement procedure. 

ITS became the first intermediary in the sale of road toll vignettes. Until 2022, the company held an almost full monopoly on these sales, charging a 7% commission on each vignette sold and earning over BGN 88.9 million between 2019 and 2022.

In January 2023, Democratic Bulgaria MPs moved for a reduction of the commission to 3% and allowing other intermediaries into this business, in addition to ITS and Digitoll Smart Infrastructure. The motion was defeated by the votes of GERB, the Movement for Rights and Freedoms, Vazrazhdane and Bulgarian Surge. 

On Wednesday, the Finance Ministry said that according to Directive (EU) 2019/520 of the European Parliament and of the Council of 19 March 2019, contracts with electronic road toll service providers, including vignettes, are not characterized as public procurement: they are concluded under uniform publicly announced conditions and prices, and anybody can apply and become a provider. The Directive was transposed into Bulgaria's Roads Act in 2019 and, implementing that Act, the RIA concludes such contracts without applying the PPA rules.

Responding to Arnaudova's opinion, the Ministry argued that these contracts do not have the characteristics of public procurement and it was therefore irrelevant whether the exception was explicitly included in the law as ITS insisted: the contracts anyway fell outside the PPA scope.

The final version of the PPA revisions was cleared with the European Commission before the bill was laid before the Council of Ministers and Parliament, the Ministry explained. It specified that the exceptions provided for in the directives are exhaustively defined and other exceptions may not be added to them.