ACF filed a report with the Anti-Fraud Coordination Directorate about BGN 14 million spent for the expansion of a non-existent port

The Anti-Corruption Fund (ACF) has filed a report about potential irregularities in a project worth BGN 14 million to the Anti-Fraud Coordination Directorate (AFCOS), Bulgaria’s designated national coordination service with the European Anti-Fraud Office (OLAF). The project is for the modernization and reconstruction of a port in the Karantinata area of the Black Sea city of Varna. The problem is that the port was built from scratch only after the program funds targeting reconstruction of existing facilities were received. Varna journalist Spas Spasov first wrote about the case in his journalistic investigation.[1]

In 2017, the Municipality of Varna applied under the European Union’s Maritime Affairs and Fisheries Program 2014-2020, under the “Investments in existing fishing ports” sector, with a project for the “modernization and reconstruction of the fishing port “Karantinata” in the “Karantinata” locality in Varna’s Asparuhovo district.” The project was worth almost BGN 14 million (about EUR 7 million). About BGN 8 million were EU grants, and the remaining nearly BGN 6 million were drawn from Varna’s own budget. The conditions for measure BG14MFOP001-1.008 “Fishing ports, landing quays, fish markets, and covered boat parks” explicitly stated that support for the construction of newly built ports or newly built fish markets was ineligible. Eligible were only investments in improving the infrastructure of existing fishing ports.

According to the journalist’s investigation, no fishing port or any other port whatsoever existed around ‘Karantinata’ until the funds were received under the European program. The construction of the harbor started on 21.05.2019. Until then, it was a narrow and wild beach at the southern end of Varna Bay, and the only structure on the beach was a metal bridge going thirty meters into the sea. This is evident from archive photographs and satellite images, and the testimonies of local people.

According to the documents, however, the harbor “came into being” at the end of 2016, a few months before submitting the project application. By a Decision from 04.10.2016, the Bulgarian Government granted the Municipality of Varna the right to manage four state-owned properties with a total area of 3.5 hectares around the “Karantinata area.” On 14.11.2016, the Municipality of Varna obtained a Certificate of Operability for a fishing port in the “Karantinata” area. The District Governor of Varna announced that “there is no fishing harbor on the territory of Varna,” but that “there is already one registered and the State has transferred 4 acres of land for its construction”.[2]

The port was entered in the register of ports on 14.12.2016, just before the submission of the project documentation for funding under the European program. According to Dnevnik’s sources, the application documents were accompanied by photos of the virtual harbor, taken using mobile pontoons assembled as floating jetties.

By a second Decision of the Government from 30.07.2017, the Municipality of Varna was granted a building right on part of the seabed for “modernization and reconstruction of the port – extension of the existing hydraulic engineering facility and construction of new port facilities.”

However, in Geodesy, Cartography, and Cadastre Agency’s information system, the property continued to be listed as a “sea beach” until August 2018. At that moment, the part of the sea beach that was already a ‘harbor,’ according to the documents, suddenly disappeared from the system. The NGO “Chamber of Surveyors in Bulgaria” filed a report about this even then. Screenshots from the system’s website before and after the change date verify it, a fact cited in Spas Spasov’s investigation.

Thus, in practice, the Municipality of Varna received funding targeted for reconstruction, which was used for the construction of a brand-new fishing harbor (Certificate of Operability for a fishing port from 14.11.2016, an application under the program – 2017), which previously existed only on paper. After the funds were received, a harbor with fishing harbor status was built on the beach site. Still, it was actually used for docking cruise yachts, as the actual photos show.

After examining the data presented in the journalist’s investigation and examining the publicly available documentation on the case, the ACF filed a report with the Anti-Fraud Coordination Directorate, the Executive Agency for the Certification Audit of European Agricultural Funds, the European Anti-Fraud Office OLAF, and the Ministry of Agriculture, Food and Forestry. The ACF urges the institutions to verify the reported irregularities in the Karantinata port modernization project, possibly affecting the European Union’s financial interests.

“We will monitor the reaction of the responsible Bulgarian and European institutions and will do our best to protect the interests of the Bulgarian and European taxpayers,” said Boyko Stankushev, Director of the Anti-Corruption Fund.

[1] Варна разшири “виртуално” рибарско пристанище с еврофинансиране“, в-к Дневник, 25.01.2021 г., достъпно тук: https://bit.ly/2P8ilOI

[2] https://www.varna24.bg/novini/varna/Novoto-ribarsko-pristanishte-v-Karantinata-e-veche-registrirano-685652