ICGB: There are no violations in the construction of the gas connection with Greece

The project company for the construction of the interconnector with Greece categorically rejects all speculations about violations and relies on the Bulgarian institutions to continue their repeatedly stated support for the successful implementation of this key project for the country and the region. This was stated in their position by ICGB AD in connection with statements regarding the project company during a meeting of the Temporary Audit Commission for the establishment of abuses and violations in the spending of funds by the Council of Ministers, ministries, state bodies, state and municipal enterprises, companies with more than 50 percent state and municipal participation and local authorities in the last 5 years.

In connection with false and misleading allegations regarding the project for construction of a gas-Bulgaria interconnection within the framework of a meeting of the Temporary Audit Commission for establishing abuses and violations in the spending of funds by the Council of Ministers, ministries, state bodies, state and municipal enterprises, companies with more than 50 percent state and municipal participation and local authorities in the last 5 years, the project company ICGB AD states the following:

The project company implementing the Greece-Bulgaria interconnector does not fall within the scope of the activities of the Temporary Commission, as the Bulgarian participation in it does not exceed 50 percent, as regulated in the rules of the Commission. The mixed investment company ICGB AD, registered in Bulgaria in 2011, has equal shareholders BEH EAD (50%) and IGI Poseidon (50%). The co-shareholder IGI Poseidon is a company registered in Greece, with shareholders the Greek public gas corporation DEPA S.A. (50%) and the Italian energy group Edison SpA (50%).

The total amount of the investment is 240 million euros, and this amount has not changed over the years. The financing is provided through the personal participation of the shareholders, EUR 45 million from the European Energy Program for Recovery (EEPR), EUR 39 million from the European Structural and Investment Funds and a loan from the European Investment Bank (EIB) in the amount of EUR 110 million. euros. The share of public funds is 35 percent of the total amount.

ICGB AD is managed by a Board of Directors consisting of 8 people. The composition of the Board is nominated on an equal footing by the two joint stock companies. Decisions at the shareholder level are taken at the General Meeting only unanimously, as well as all decisions with a material value of over BGN 70,000. The two executive directors - Ms. Teodora Georgieva on the Bulgarian side and Mr. Konstantinos Karayanakos on the Greek side - represent the company only together with a mandate given by the Board of Directors. Given the described management structure of the company, no key decision on the management of the IGB project can be made alone, and decisions related to changes in deadlines are taken only unanimously by the General Assembly.

After receiving an invitation to hear the management of the project company, the Chairman of the Board of Directors and the Executive Directors informed the Chairman of the Temporary Parliamentary Committee that the company does not fall within the scope of the Commission, voted by the National Assembly of Bulgaria. The members of the board have been duly notified of the decision taken, and the information has been brought to the attention of the Ministry of Energy.

The company and its shareholders fully assist the Bulgarian institutions and control bodies in carrying out inspections and requests for information on the implementation of the project. Despite the non-participation in a meeting of the Commission, the project company has already sent detailed information in a letter with outgoing number IX-1 / 03.09.2021 to the Temporary Committee on specific issues related to both funding and deadlines for the IGB project. .

Given the detailed information provided, the false and misleading allegations made in public during the Commission meeting are puzzling. The project company categorically rejects the allegations that the company has suffered financial damage from unsolicited penalties. The penalty has a ceiling stipulated in the contract with the construction company, and it is not more than 10% of the value of the contract or a maximum of 14.5 million euros. If a decision is made to extend the contract for reasons beyond the control of the parties - the occurrence of a global pandemic of COVID-19 - it is not possible to activate a penalty clause. As it is known, the penalty is a sanction, which is imposed in case of culpable non-fulfillment of the obligations. The decision to extend the term for objective reasons was taken by the Board of Directors and the General Meeting of the company.

The remuneration of the executive directors and the members of the Board of Directors is public, as well as of all members of the management and control bodies of the companies from the BEH system. Calculations of the order of personal remuneration of over BGN 1 million are absurd and aim only to attract the attention of the media.

The management of ICGB AD makes all necessary efforts for transparent and effective project management, as its work contributes to the successful passage of a number of regional, national and international inspections by institutions, independent experts and companies. Since the beginning of this year alone, the IGB project has been subjected to more than 8 different inspections, and all conclusions are without violations. The gas interconnector project with Greece is partly financed by European structures and funds, as well as a loan from the European Investment Bank, which requires additional control mechanisms and requires a transparent management model. This ensures that all activities and procedures for the implementation of the project are performed in accordance with all legal requirements. Additional inspections and audits by independent international institutions are a key condition on which the absorption of funds depends. The legality of all actions of the project company and the main contractors is directly related to the progress of the project. Without positive results with constant monitoring, IGB would not be possible at all.

The activity of the project company ICGB AD in project management for the construction of an interconnection Greece - Bulgaria is carried out in synchrony with the Bulgarian and European legislation and meets the highest standards. ICGB AD categorically rejects all speculations about violations and relies on the Bulgarian institutions to continue their repeatedly stated support for the successful implementation of this key project for the country and the region. The project company remains ready to provide any necessary additional information to the Ministry of Energy, BEH and the Interim Commission.