€511.3mn of funds for roads in Bulgaria spent on luxury properties, interior minister says

€511.3mn of funds for roads in Bulgaria spent on luxury properties, interior minister says
Construction of Bulgaria's Hemus motorway.
By Denitsa Koseva in Sofia June 9, 2022

Around BGN1bn (€511.3mn) of the funds provided by the former government of Boyko Borissov for road construction were spent on the construction of private luxury properties, Bulgaria’s Interior Minister Boyko Rashkov said on June 9.

The announcement came a day after There Are Such People (ITN) leader Slavi Trifonov said he is pulling out his ministers from the government and withdrawing from the four-party ruling coalition, throwing the country in a deeper political crisis than that in 2021 when three general elections were held.

Trifonov clashed with Prime Minister Kiril Petkov when the latter accused ITN of demanding to get control of BGN3.6bn additional funds for the regional development ministry, headed by ITN’s Grozdan Karadzhov. Petkov said that the party wanted to give the money to companies that stole millions from road construction projects during Borissov’s time in power.

At a press conference, live broadcasted by Dnevnik news outlet, Rashkov said that the BGN1bn was transferred to bank accounts of companies and individuals who had then withdrawn the money and spent it on the construction of luxury homes, villas, residential complexes and other buildings in Sofia and near the capital.

Rashkov refused to name the companies and individuals, saying this was still under investigation.

The Road Infrastructure Agency (API) paid BGN400mn to state-owned company Avtomagistrali for lots 7, 8 and 9 of the Hemus motorway without a detailed development plan. Of that sum, BGN84.5mn was transferred in advance to another company for Lot 8. That company used BGN27mn to buy a property in the centre of Sofia where construction works are in progress, Rashkov said.

Avtomagistrali transferred around BGN15mn to another company. These funds, according to the interior minister, were used for the construction of buildings, with BGN1mn of the sum being transferred directly to bank accounts of the owners of the unnamed company as a dividend. Part of that money was subsequently transferred to accounts in the UAE.

BGN6mn were transferred to bank accounts of other daughter companies, while BGN12mn for Lot 8 were paid to a company, which subsequently transferred BGN8.5mn to the personal account of an unnamed individual who had a contract with that company. The contract was terminated several months later, Rashkov said.

The interior minister showed reporters photos of properties acquired with money for road construction but declined to provide details.

API also transferred BGN670mn to Avtomagistrali for Lot 5 of the Hemus motorway, paying more than BGN100mn in advance without construction contracts. These funds were subsequently transferred to five other companies. Several bank transfers for BGN10mn-15mn each were made to each of these five companies and subsequently withdrawn in cash. One of these companies has subsequently built a luxury residential complex.