Smolyan in a TITANian grip

Regardless of the changes in the mayor’s office and the composition of the majority in the Municipal Council, the town continues to gasp in a hoop of companies-monopolist in the field of public procurement.

Снимка: Община Смолян

In November 2011, the former mayor of Smolyan Dora Yankova (BSP) relinquished her office to Nikolay Melemov (GERB). The main messages in the campaign he won the election with were that he would work to reduce the local taxes and fees, which are among the highest in the country, and that he would “cut off the octopus”. But until now, in the middle of his second term, Melemov not only failed to fulfill his promise, but managed to “creatively develop further” the inherited from Dora Yankova in 2011.

Almost all activities related to cleaning, transportation, disposal to landfill and waste treatment, winter maintenance, road construction and maintenance of the municipal infrastructure in Smolyan have been done for years by several companies – “Titan-Cleaner” Ltd, “Eco Tradex Group” AD, “Eko-Titan Group” AD, as well as consortia “Eco World 2”, “Sport for Smolian” company under the Obligations and Contracts Act and “Smolyan E.K.” company under the Obligations and Contracts Act. For their connectivity through joint owners they are also known with their common “nickname” – “Titan”. Partners in these companies over the years are three physical persons from Haskovo – Velichko Minev, Daniel Gargov and Tencho Lilyanov. Since 2006 up to now, the business of the three in Smolyan, related to the public procurement, is flying upwards, regardless of the majority of the municipal council or the changes in the mayor’s office. The local administration’s costs for payments on contracts with their companies are also rising. In 2015, the Ministry of Finance ranked Smolyan among the most indebted municipalities in the country – second in terms of commitments for expenses, the ninth in amount of overdue liabilities, and 11th in total debt. This was the result of the activities related to household waste, according to a report from the State Financial Inspection Agency dated 4.08.2017.

Who is who?

Velichko Minev entered the private business after resigning on August 5, 1999, as a chief of the Haskovo branch of “Vointech”, a single proprietor company of the Ministry of Defense. Shortly before, Emil Dimitrov (Revizoro) had given a press conference at which he accused Minev, that he has misued BGN 80 mln from sales of fuel, bought at lower prices from “Neftochim”.

Tencho Lilyanov was detained in 1999 by the police as a participant in a cigarette smuggling channel at the border crossing point of “Novo Selo”. He has partnerships with dozens of companies in Haskovo, Dimitrovgrad, Sofia, Smolyan, Veliko Tarnovo and other cities.

Start without competition

Until 2006, the local administration in Smolyan itself carried out the collection and transport of the household waste, the maintenance of the cleanliness and the green areas in the town. The expenses for all these activities do not exceed BGN 800 thousand per year. At the end of May 2006, the then mayor Dora Yankova (BSP) announced a tender for open procedure public procurement for all these activities, including snow cleaning, park maintenance, green areas and landscaping. The announced term for the execution of the procurement was 15 years and its value was to be determined each year with the plan-account for the revenues from the municipal fee “Household waste”, adopted by the municipal council.

According to one of the requirements set out in the notice, applicants must also have their own equipment for the waste collection and disposal, snow cleaning, etc.

Only one bidder – “Titan Cleaner”Ltd applied to the tender and was the logical winner, after which signed a 15-year contract, which entered into force on October 1, 2006. The annual amount that Smolyan is obliged to pay for the performed activities is 662398,38% of the minimum wage or in absolute value of BGN 1 million, at the level of minimum wage BGN 160 at that time. At present, the amount estimated according to the same scheme is almost BGN 4 million. At the moment of conclusion of the contract, the partners in “Titan Cleaner”are “Titan-AC” (50%), Tencho Lilyanov (35%) and Velichko Minev (15%).

In publication of the site “Bivol“ dated this year, Lilyanov is mentioned also as a partner in the company “Forucom“. His partner there is  Daniel Gargov, who became popular as the “brother in law of Delyan Dobrev“, since he is husband of his first-line cousin. ”Forucom“has a majority stake in another company, the “Eco Tradex Group”, which was ranked in “Top 3” of the companies that received most of the money from the rehabilitation program.

The former mayor of Smolyan Dora Yankova (BSP)
Photo: “Otzvuk”

The short memory

Two days before the contract with “Titan Cleaner” for cleaning of Smolyan entered into force – May 29, 2006, the Mayor Dora Yankova “forgot” about the requirement to the particpants in public procurement “to have specialized equipment and mechanization for waste collection and disposal”. Without the assessment of a licensed appraiser and without a decision by the City Council, she rented all the 12 specialized vehicles, with which the municipality had cleaned the city and transported the waste, to “Titan Cleaner”. The monthly amount that the company is obliged to pay for this is BGN 1,820,  VAT included. Together with the twelve municipal cars in early November 2006, “Titan Cleaner” began to use all 1,750 municipal containers of the ” Beaver” type, as well as 750 buckets type “Meva”. It was not until the end of 2009 when it was found that this was done without a lease contract. Only on December 30, 2009, the administration of Dora Yankova charges a monthly rent of … BGN 0.60 per container (total BGN 875, VAT excluded, for 1,750 containers) and BGN 0.30 bucket (BGN 187, VAT excluded for 750 pieces).

Cousins, spouses and best men

Days after the start of the 15-year Contract with “Titan Cleaner”, on October 9, 2006, the Mayor of Smolyan Municipality Dora Yankova opens a procedure for awarding a public procurement contract for the reconstruction of a local landfill “Teklen Dol”. The site is about 15 km west of the city.

 The deadline for submitting bids is only two weeks after receiving the notice at the Public Procurement Agency. Meanwhile, on October 24, in Haskovo, a Consortium “Eco Tradex Group” was established which immediately prepared and submitted a bid worth almost BGN 10 million, VAT included. Offers are also submitted by “Valmex”LTD – Sofia, “Dulger” LTD – Smolyan, “Trakia – RM” Ltd – Plovdiv, “Building and Entrepreneurship Holding”Ltd – Sofia.

The Commission, appointed by Dora Yankova, ranked at first place  as the “most economically advantageous” bid the offer of “Eco Tradex Group”. Due to one of the conditions laid down in the terms of the public procurement, on December 12, the partners in “Eco Tradex Group” registered a joint stock company with the same name as their consortium, with 99.99% of the shares being held by “Forucom and Co”, and the other partners are Daniel Gargov with 30% and Nadezhda Lilyanova with 70%. Chairperson of the Board of Directors is again the cousine of Delyan Dobrev – Rositsa Gargova, and Executive Director – her husband Daniel Gargov.

Снимка: Зарко Маринов

Photo: Zarko Marinov

 Advance before loan

Dora Yankova signs a contract with the newly established company and immediately transfers BGN 960,000 as an advance payment.

In 2007, the company accounted BGN 287,000 for construction and assembly works and BGN 250,000 for “external” excavation and transport services for the construction of the landfill site in “Teklen Dol”. Checking the company’s records, however, shows that it has worked without personnel and has ensured only one person for the months from July to December the same year. According to the company’s annual financial report, its costs for remuneration and insurance are only BGN 2 thousand. At the same time, from the report it becomes clear that a large part of the funds for the construction of a landfill in “Teklen Dol”, paid in advance by Dora Yankova, were given as loans to related persons with an interest of 6%. After accounting the “external services”, at the end of the year, “Eco Tradex Group” declared a profit of BGN 450,000.

Multiply by two!

In October 2007 Smolyan Municipality concluded another contract with the company “Eco Tradex Group” – this time for a little more than BGN 977 thousand. This is without announcement due to “additional construction and assembly works” at the “Teken Dol” depot. After a year – on November 6, 2008, the company signed a third contract, again without a notice and with direct negotiation, this time for nearly BGN 4 million. Thus, the total value of the “most economically advantageous tender” reaches almost BGN 15 million. On the last working day of 2008, Dora Yankova launched a new public procurement contract for the construction of two more cells in “Teklen Dol”. The single offer submitted to the tender is again of “Eco Tradex Group” and is worth over BGN 6 million. Thus, the cost for reconstruction of the regional depot for solid household waste of Smolyan from BGN 10 mln swells to almost BGN 21 mln.

While the construction of the landfill site in “Teklen Dol” is in progress, the Smolyan municipality is in a hurry to announce a public procurement for its operation.

 This time, the offer received is only one. It was filed by the joint-stock company “Eco-Titan Group”. The check in the Commercial Register shows that its owners are already known – “Cleaner” LTD (90%) and ‘Eco Tradex Group” AD (10%). On the board of directors of “Eko Titan Group” are currently Velichko Minev, Daniel Gargov and Tencho Lilyanov. The landfill contract signed by Mayor Dora Yankova on July 10, 2008 is for 15 years and will expire only in mid-2023.

Melemov wins

the Mayor of Smolyan Nikolay Melemov
Photo: Municipality Smolyan

In 2011 the mayor of Smolyan became Nikolay Melemov (GERB). Yet during the first year of his mandate, the planned amount for cleaning, landscaping and maintenance in winter reaches BGN 3.1 million. However, as at the time of Dora Yankova, at the end of February 2013 the manager of “Titan – Cleaner” Hristo Hristov again reports that the company’s investment program for the previous year has not been implemented due to the “irregularity of payments by the contracting authority”.

Melemov also demonstrated an unexpected continuity in the management of the “Teken Dol” depot. There, he decided to build a separation and composting installation for household waste worth BGN 3.6 million, VAT included. The public procurement for its design and construction has been won by the company under the Obligations and Contracts Act and “Eco World 2”, where old acquaintances are emerging under the seemingly “new outlook”.

Velichko Minev is the manager, and its partners are “Eco Tradex Group” and the company “Reco – Engineering”. In order to close the cycle of work at the “Teklen Dol” depot, in the beginning of September last year, after a public procurement (traditionally with one single participant), a contract for the operator of the new installation was signed with “Eco – Titan Group” AD. The contract is for 5 years and is worth BGN 3.6 million.

And that’s not the end!

It turns out that the separator needs a retaining wall because there is a “danger of landslide and rock masses”. That is why, in January 2016 the Mayor Melevov signed a contract again with “Eco World 2” worth almost BGN 334 thousand.

Expanding of activity

After imposing complete control over all activities related to household waste, cleanliness, landscaping and snow cleaning in Smolyan, Velichko Minev, Daniel Gargov and Tencho Lilyanov are also involved in the construction of buildings, sports facilities, streets and roads in Smolyan.

The company under the Obligations and Contracts Act “Sport for Smolyan”, in which the main partner is “Eco Tradex Group”, has built for almost BGN 5 million a sports playground and repaired a sports hall and a swimming pool in the city. During the repair of the swimming pool again “contingencies” emerged and the procurement swells by another BGN 1.9 million.

Through the company under the Obligations and Contracts Act “Smolyan E.K.” at present “Eko Tradex Group” is executing a public procurement for repair of streets and roads on the territory of the municipality for BGN 3 million.

And finally – self-control

In January 2016, a working group of 8 counselors was set up by a decision of the Smolyan Municipal Council, which had to examine all the materials concerning the collection of waste, to draft an opinion and to submit it for consideration and voting in the council. The initiative is of the local “Coalition for development of Smolyan Municpality” (CROSS) and its leader is Kiril Asenov. Five months later, in May 2016, from eight members of the group, only two went to a meeting with the mayor Nikolay Melevov, the manager of “Cleaner” Hristo Hristov and the representative of the owners Velichko Minev. According to a message distributed by the press office of the municipal administration, at that meeting a decision was taken thatv not the mayor of the municipality or the municipal council, but the “operating company shall develop and shall propose several comparative options from which to choose the best taking into account the activity, accountability and transparency”. And the Municipality shall send a request to the Public Procurement Agency how to change the contract for cleaning and transporting of household waste and snow in its territory in order to optimize its price. “Within one month a date will be set for the next meeting” – reads in the press release.

Today, a year and ten months later, date for a next meeting is not scheduled, there is no result of the request to the Public Procurement Agency, no options for quality, accountability and transparency are proposed.

And the municipal councilors, who continue to ask how the contracts of Smolyan Municipality with “Titan” are executed, are already a minority.


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