Bulgaria anti-trust regulator halts 675M leva passenger trains tender

Written by on October 15, 2018 in Business - Comments Off on Bulgaria anti-trust regulator halts 675M leva passenger trains tender

Bulgaria’s Commission for Protection of Competition (CPC) has temporarily suspended the public procurement tender by the country’s state railways BDZ for the purchase of 42 trainsets, estimated at 675 million leva, or about 345 million euro.

The watchdog’s ruling, issued on October 11, was faxed to BDZ on October 12, according to a document posted on the railways’ website. The deadline for bids was 4.45pm Sofia time on October 12, with the opening of bids scheduled for October 15.

On October 15, BDZ also filed a notice with Bulgaria’s public procurement agency to formally notify it of the tender’s suspension.

Since BDZ called the tender on August 17, CPC has received several complains about the proceedings from Germany’s Siemens Mobility and Skoda Transportation, two rolling stock manufacturers with a track record of supplying BDZ. None of those complains, according to notices posted on the CPC site, asked for the tender to be suspended.

The complaint that did halt the tender came from CRRC Qingdao Sifang, a subsidiary of China’s state-owned CRRC Corporation, the world’s largest rolling stock manufacturer by revenue.

CRRC Qingdao Sifang lodged its appeal on October 5 and it was formally prompted – according to CPC records – by BDZ’s communication on September 25, in which it answered a number of inquiries made by prospective bidders, one of several such clarifications made public by the railways since the start of September.

That particular document contained answers to 19 separate questions and it was not immediately clear which part of the communication was the reason for the complaint.

The tender is part of BDZ’s strategy to modernise its rolling stock. Answering inquiries from potential bidders about the financing of the deal, the company said that it has an annual state subsidy specifically for rolling stock purchases of at least 35 million leva and was also awarded a further 100 million leva by the government in July.

BDZ also said that there were “active processes” to secure additional financing for the purchase, but gave no further details. Bulgaria’s Cabinet has an outstanding concession tender for the Sofia Airport, with upfront payment (at least 550 million leva) slated to go to BDZ, the bulk of which was expected to be used for rolling stock purchases.

(Photo: Clive Leviev-Sawyer)

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