Bulgarian PM offers little clarity on South Stream status

Written by on June 13, 2014 in Bulgaria - Comments Off on Bulgarian PM offers little clarity on South Stream status

The future of the South Stream pipeline in Bulgaria remains muddled, with parliamentary hearings of Prime Minister Plamen Oresharski and Economy Minister Dragomir Stoynev on June 13 offering little clarity into the current status of the project.

Last weekend, Oresharski said that he had ordered for work to be suspended, making the announcement after meeting with three visiting US senators, but in the intervening days, confusion remained whether this was a verbal declaration or a binding decree by the head of government.

Addressing the National Assembly on June 13, Oresharski failed to clarify that point, nor did Stoynev – whose ministry oversees the state-owned company that holds Bulgaria’s stake in the project – say whether the order was being carried out.

Oresharski’s announcement at the weekend was widely interpreted as Bulgaria finally acquiescing to the European Commission’s demands to freeze work on the project until it is brought in line with EU regulations. The Commission started infringement proceedings against Bulgaria for not following EU rules on public procurement – according to Oresharski, Bulgaria has until June 29 to answer EC’s request for information, the first stage of the process.

Doubts about Oresharski’s intention to freeze work on South Stream remain, however, with Gazprom CEO Alexey Miller saying on June 12 that his company was not notified officially of such a decision by the Bulgarian government and would thus continue to work on the project.

It did not help the government’s position that the Speaker of Bulgarian Parliament, Mihail Mikov, said on June 12 that Oresharski could not actually order the cessation of work and described Oresharski’s earlier statement as “just some declaration.”

Oresharski’s position was further undermined by his official confirmation, for the first time, in front of Parliament that Bulgaria has already signed a contract with Russian company Stroystransgaz (whose alleged owner Gennady Timchenko is subject to US sanctions as a result of Russia’s annexation of Crimea) and a consortium of five Bulgarian firms to build the Bulgarian stretch of the Kremlin-backed pipeline.

He declined to give any details on the contract, saying that it required the approval of the other signatory parties, but his admission comes only a day after the opposition Reformist Bloc claimed that such a contract was signed only days after the European Commission president Jose Manuel Barroso asked, at the end of May, that participating countries suspend all work on the pipeline. (Signing the contract could also potentially make Bulgaria liable for damages in case work is indeed frozen.)

The Reformist Bloc has also claimed that not only did the Bulgaria sign the construction contract, it has also signed the contract to take the 620 million euro loan to finance its share of construction – allegedly on terms that were far from favourable for Sofia.

(South Stream official welding ceremony in Bulgaria. Photo: gazprom.ru)

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