site.bta EPPO Charges Four over EUR 94.5 Mln Fraud in Railway Signalling Systems Contract in Bulgaria

The European Public Prosecutor’s Office (EPPO) announced Monday that its Sofia office has brought fraud charges against four suspects in an investigation into a project to design and build signaling and telecommunication systems for the Bulgarian rail network.  The project, which concerns the railway section between Plovdiv, the country's second largest city, and Burgas, on the Black Sea coast, is worth over EUR 94.5 million in EU financing.

The contract for the execution of the project was awarded to a consortium of four companies. Two managers of an Italian company and the manager of a Bulgarian company, which were all part of the consortium that won the contract, have been charged with public procurement fraud. A former director of the National Company Railway Infrastructure has also been charged.

A EUR 50,000 bail was imposed on three of the accused, and EUR 5,000 for the fourth. The manager of the Bulgarian company is prohibited from leaving the country.

According to the investigation, the legal representatives of the companies which formed the consortium submitted false information to the National Company Railway Infrastructure, in order to illegally obtain EU funding. In particular, they declared that one of the companies had previous experience in Global Systems for Mobile Communication on Railway (GSM-R) and on the Future Railway Mobile Communication System (FRMCS), which allowed them to win the tender. However, based on the evidence, none of the four companies had the necessary experience. 

EPPO believes that the former CEO of the National Company Railway Infrastructure signed the contract and authorized the payments despite knowing that the information submitted was false. 

The consortium also submitted a declaration guaranteeing that they would execute the contract themselves, without using a subcontractor. However, later, they signed a contract with an Austrian subcontractor with applicable experience. This subcontractor had previously been excluded from the public procurement procedure for not meeting the technical requirements, EPPO said.