site.btaUPDATED EPPO Probes Zheleznitsa Tunnel Contractor, GP Group Says Not under Invstigation

The European Public Prosecutor's Office (EPPO) Monday said it had ordered searches in six companies and four private houses in two Bulgarian districts. The searches are intended to gather evidence in a suspected case of embezzlement, misuse of EU funds and money laundering linked to the construction of the Zheleznitsa tunnel, the longest road tunnel in Bulgaria that was recently opened for traffic, EPPO said in a press release.

The construction of the Zheleznitsa tunnel along the Struma Motorway was led by the Bulgarian Road Infrastructure Agency, which contracted a consortium of three companies to implement the project, co-financed by the European Cohesion Fund, under Operational Programme Transport and Transport Infrastructure (2014-2020). The contractor received approximately BGN 185 million (around EUR 95.6 million), 85% of which was financed by EU funds. 

After an alert received by Bulgaria's State Agency for National Security, the EPPO in Sofia opened an investigation, which found that one of the companies that is part of the consortium is suspected of several criminal offences, including embezzlement, misuse of EU funds and money laundering. The company under investigation allegedly made, in a very short time, several fictitious money transfers amounting to more than BGN 11 million (EUR 5.6 million) to a chain of hollow companies, which led to a withdrawal of large amounts of cash by individuals with criminal records. These companies and individuals are also appearing in another ongoing EPPO investigation concerning infrastructure projects in the railway sector.

The investigation is ongoing, in order to ascertain the nature and extent of the suspected criminal activities. Monday's searches were conducted by the General Directorate of the National Police and the State Agency for National Security, the press release said.

Later in the day, GP Group Jsc. said it was not subject to an investigation by EPPO in connection with the Zheleznitsa tunnel. The company said it had fully cooperated with the law enforcement authorities and had provided all the requested documents in the course of the probe.

The Zheleznitsa tunnel was launched on February 20. It is about 2 km long and the approaches to it bring the total length of that motorway section to 5 km.

The tunnel was built by a consortium made up of JP Group, Global Construction and VIA PLAN. The contract is worth BGN 215,362,525, excluding VAT.

The project is co-financed by the EU's Cohesion Fund and the State budget through Operational Programme Transport and Transport Infrastructure 2014-2020.