The Bulgarian Food Safety Agency (BFSA) has spent public funds worth nearly BGN 30 million to dispose of animal carcasses since March 2018. The money flowed into the pockets of only two firms which were paid to process a record number of carcasses. The companies used mobile incinerators, whose capacity was twice as small as than that of regular incinerators.
Were these millions spent lawfully and does the BFSA exercise timely and effective control over the incineration process and the amount of incinerated carcasses? The Anti-Corruption Fund Foundation (ACF) has investigated the public procurement orders through which dozens of millions were expended for mobile incinerators. The ACF legal team has identified a number of red flags that should be examined by the relevant authorities.
At the end of 2017, the agency initiated a public procurement order for the disposal of animal waste for a period of three years, at a cost of BGN 30 million. The order was suspended following a complaint from one of the participants, allowing the FSA to proceed with the so-called direct contracting. The BFSA sent contract invitations to only two firms which own mobile installations (incinerations which burn the carcasses at very high temperature) – Sin krast 2016 and Eko BG SJP. The owners of Sin krast 2016 are Yanka Nikolova-Lazarova and Borislav Lazarov. The latter rose to fame during the garbage crisis in the capital when he was manager of one of the concessionary firms. On the other hand, Eko BG SJP is owned by Dimitar Mandzhukov and Dimitar Dimitrov.
The first contracts, worth BGN 12 million, were awarded in March 2018. Among the advantages attributed to the selected two companies were their ability to move the installations and to react swiftly and on the spot, if necessary. However, the capacity requirements for the firms, mentioned in the tender documents, were lower in comparison with the requirements listed in previous procurement orders. Moreover, it is not clear how the BFSA exercises control over the incineration process and the number of carcasses incinerated, given that the chosen firms are not required to equip the mobile incinerators with measuring scales.
By the end of 2018, the BGN 12 million invested by the BFSA for the disposal of carcasses were all spent and the agency proceeded to sign annexes to the contracts. The first annex was signed on 16 November 2018, followed by several more in the beginning of this year. Thus, the two firms received an additional BGN 17.5 million on top of the main contract, worth BGN 12 million. There is no record of the companies providing additional performance securities, commensurate with the newly-assigned work. On the contrary, an annex from January 2019 releases part of the performance securities in contravention to the contract, which states that the security should only be released once a contract is completed successfully and with no circumstances which require that the security be retained.
The annexes assigned additional activities, connected with the emergence and aggravated epizootic of plague in small ruminant animals, African swine fever, and bird flu. At the same time, there was no public record of the usage of the mobile incinerators to deal with these epidemics. On the contrary, infected animal carcasses were buried in the ground. With a letter dated 2 August 2019, the BFSA informed ACF that “to the present moment, the carcasses of animals infected by African swine fever have been buried and have not been sent to incinerating furnaces or other facilities for their disposal.” This approach creates significant risks for polluting the environment and does not contain the spread of possible infection.
Based on the price per ton agreed with the incineration firms and the total amount of payments made, ACF has calculated that within a period of one year the firms incinerated around 20, 000 tons of carcasses and other animal waste. This is nearly three times the amount burned in incineration plants in Shumen and Varna in 2017. Such a quantity has never been incinerated before in Bulgaria and experts claim that it is impossible for installations with such small capacity to achieve such results. It is a whole different question where all this animal waste has come from, given that the incinerators have not processed any waste caused by the epidemics.
The BFSA refuses to provide information regarding the quantity of processed animal waste that has been paid for since the contracts with the mobile insineration firms were signed, neither is it willing to answer how these amounts are regulated. The agency’s argument is that “there is no overriding public interest in disclosing the information.”
In 2019, Sin krast 2016 and Eko BG SJP signed new contracts for disposing of animal waste with the BFSA. The contracts, worth BGN 30 million, run until the end of 2020.
The public procurement orders for the disposal of animal waste contain numerous potential violations of the Public Procurement Act, especially related to the signed annexes. For example, there is overlapping of contracts. For the period April-June 2019, EKO BG SJP had two contracts with an identical subject on two procurement orders. With regards to Sin krast 2016, the overlapping of contracts has been in effect since 2018.
ACF will refer the case to the Public Financial Inspection Agency and will inform you of the actions taken by the authorities. For more information, click here.