Photo: Dimitar Petrov
“I have told my administration that I do not want to hear about programs with European funds…. This practice must be stopped because these financial corrections are crippling the municipalities.” With these words, the mayor of Tutrakan Municipality, Dimitar Stefanov, expressed his dissatisfaction with the sanctions imposed on the municipality for the implementation of European projects to Prime Minister Rosen Zhelyazkov during his visit to Tutrakan.
There is no project that does not involve financial adjustments, Rosen Zhelyazkov told the mayor, citing as a striking example a penalty imposed twice by the managing authority on the same project after the municipality appealed to two courts and won the case in 2024.
What is it about
The sanction complained about by the mayor was imposed on a public procurement contract conducted by the municipality for “Engineering – design, construction and installation works and author’s supervision of a multi-family residential building – Block “ZORA” in the town of Tutrakan.
By a decision of May 2024, the Deputy Minister of Regional Development and Public Works and Head of the Managing Authority of the Operational Program “Regions in Growth” imposed a financial correction on the Municipality of Tutrakan in the amount of BGN 96,600.00 including VAT, representing 25% of the non-repayable financial assistance under a contract with a total value of BGN 386,400.00 including VAT.
The sanction imposed by the managing authority was primarily due to the fact that, when selecting a contractor, complicated and formalized requirements were formulated for the content of the technical proposal, which resulted in an unreasonable administrative burden for the participants. This unreasonably limited the participation of persons who could have performed the activities included in the subject matter in a timely and high-quality manner.
The other reason was that the contract was concluded with a contractor who had not proven that there were no grounds for exclusion from the procedure – the selected company had been sanctioned by the Labor Inspectorate for violations of labor legislation and should have been excluded from participation.
On the basis of Article 7 of the Regulation on the indication of irregularities, a total correction was determined for the two violations, in the amount of the higher percentage provided for each of them, i.e. 25% of all eligible costs under the contract.
The Municipality of Tutrakan appealed this decision before the Administrative Court of Silistra, which upheld the sanction. Subsequently, following an appeal by the Municipality of Tutrakan, the Supreme Administrative Court overturned the decision of the Silistra Administrative Court.
In 2025, however, the managing authority imposed a financial correction of the same amount on the same project. By a decision of June 2025 on the determination of a financial correction, issued by the Deputy Minister of Regional Development and Public Works, a financial correction of 25% was determined on the same contract for the implementation of the already renovated block. The reason for imposing the sanction is that the contracting authority did not exclude from participation in the public procurement procedure a candidate or participant who had been found guilty of a violation of labor legislation by a final penalty order or court decision. In other words, this time only the second ground for the initial sanction, which was the subject of the first case, was used, but the percentages are the same. Currently, a new case has been brought before the Silistra Administrative Court and an open hearing has been scheduled.
Are there grounds to believe that the selected company was preferred by the municipality over the others?
The public procurement documentation shows that a total of three companies participated in the tender procedure for the renovation of the Zora block: Roto Engineering EOOD, NSK EOOD Sofia, and Polistroy EOOD.
The contract was awarded to Roto Engineering EOOD, and the other two companies were disqualified by the evaluation committee appointed by the mayor. This is the company that, according to the managing authority, should have been disqualified from the procedure due to violations of labor legislation.
A review of the Central Register of Public Procurement CAIS EOP shows that Roto Engineering EOOD is one of the regular participants and winners of construction contracts in the municipality of Tutrakan. In addition to the renovated and sanctioned Zora block, it was also selected to renovate another block in Tutrakan – the Vazhod 1 block for BGN 2,316,000. Part of this block had collapsed and urgent measures had to be taken to reinforce it a few years ago. The same block was presented to the Prime Minister as a successfully completed project financed with EU funds. No sanctions have been imposed on it so far, but our check found that subcontractors with contracts with the selected company are working on the site, even though the selected contractor declared in the procedure that it would not use any.
Which company is subject to sanctions?
The company Roto Engineering EOOD is owned by architect Stoyan Kisyov. However, in addition to the renovation of apartment blocks, architect Kisyov also has long-standing interests in other business initiatives in Tutrakan. He is the initiator of the idea to build a retail park on part of the territory of the Hristo Botev school, which is municipal property.
