Black Sea hotels rented without tender

The Defence Ministry offered for rent a development of two hotels in the Black Sea resort of Kiten to the company Global Trade without calling a tender

Global Trade pays a modest 41 000 euro in annual rent for the holiday complex of 140 beds. During the first five years of the agreement the Defence Ministry also receives 40 per cent of the income, Bulgarian-language daily Dnevnik reported on August 5. The contract was concluded in 2003 and expires in 2013.

Yordan Vassilev, who is indirectly connected to the construction tycoon Trace Group, owns Global Trade. Former defence minister Nikolai Svinarov signed the rental contract with him after receiving a report from the then-director of the Recreation Department Nikolay Tsonev, who is the current Bulgarian Defence Minister. Tsonev notified his then boss, Svinarov, of Global Trade’s proposal via the report.

"Unfortunately, I don’t remember it at all, so I cannot help you," Svinarov told Dnevnik after he had been asked how he chose Global Trade. According to Tsonev's media advisor Tsvetomira Zhekova, the company was the only one interested in managing the two hotels in Kiten and this was the reason to seal the contract with it. Global Trade’s engagement was to make serious investments to improve the condition of the two hotels that were partially destroyed.

Zhekova said that the ministry did not call a tender because, according to legal advisors from the ministry's Social Activities department, the law, by which the agreement was concluded, did not require calling a tender for this real estate. The deal was signed in accordance with art.14 of the Republic of Bulgaria's Defence and Armed Forces Act: This states: "For realisation of additional and service activities the Defence Ministry can conclude contracts for joint activities with physical and legal entities for a period of 10 years".

After the first five years of the contract, the ministry started receiving annual rent of 42 500 euro, while income started being equally divided.

"Mr Vassilev does not wish to comment on company affairs. This is none of your business. Ask the Social Activities executive agency of the Defence Ministry because they own the base," Yordan Vassilev, from Global Trade, told Dnevnik.

Source: Sofia Echo

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