How Bulgarian rangers purchase Russian machines despite EU sanctions

Small salary, large forest – this is the maxim by which all Bulgarian rangers live by, although it was revealed recently that the forestry directors earn about 15,000 leva monthly.

The scandals linked to the state-owned enterprises, which are under the hat of the Ministry of Agriculture, are not one or two in recent years. Indictments for illegal logging emerge regularly along with allegations from concerned citizens but none of those amount to anything more.

The famous SUV of Boyko Borissov’s, which he used to cross the county from corner to corner, also turned out to be owned by a forestry. The luxurious Toyota Sekvoya was given by the Southeast state forestry from a classmate of the former minister of agriculture, Dessislava Tancheva. The company in turn donated several cars to the National Security Service, according to Borissov himself, so it could drive the first people in the country, like President Roumen Radev, caretaker PM Stefan Yanev, etc.

Today the SUV’s are once again in the focus of the rangers. Over the past year the six state-owned floristries carried out a series of public procurement procedures to purchase new vehicles. A total of 365 vehicles were bought for about 25 million leva, according to the Public Procurement Registry.

The common theme in all procurements in each of the six state-owned companies is that they were designed in a way that effectively specifies a particular model. For this reason it is not surprising that the tenders lack competition and there is only one candidate.

The only exception is the procedure in the Southcentral State Forestry. Three candidates took part in that tender but two failed to make it to the stage of the evaluation, in which the price offers are revealed, rendering the third candidate without a rival.

This is hardly a coincidence. Competition is nonexistent because the winner is predetermined in the very technical requirements of the tender calls, as one auto importer, who wished to remain anonymous, told Mediapool.

The new car park of the floristries comprises Toyota Hilux, Hyundai Santa Fe, Suzuki Jimni, Dacia Duster, Lada Niva and UAZ. The last two are Russian machines, which are in the banned list of the EU. They are among the sanctioned companies because of the war in Ukraine.

"The Ulyanovsky Avtomobilny Zavod (which manufactures UAZ) is one of the main suppliers of the Russian army. Buying its vehicles is banned since the summer of 2022. Several months later, a ban for buying Lada from the factory of Toliaty was also imposed. The sanctions were approved in October and enacted in the beginning of 2023.

The fact that the sanctions are being bypassed is a public secret. Russian neighboring countries became a hub for redistributing Russian goods for export and vice versa – for importing Western goods in Moscow.

Moreover, just days ago the president of the European Commission, Ursula von der Leyen warned that measures will be taken against this swindle by third parties.

But this is something that is happening in EU countries as well. One dealer told Mediapool that a portion of Russian goods, besides going through the former Soviet states in Kavkaz as Armenia, Georgia and Azerbaijan, pass through the Baltic EU member states. On the boarder customs don’t look at where the production originates, instead they inspect the company named on the invoice. For example, if you buy a Lada from the company "Pesho", and if "Pesho" has an identification number, which is not on the blacklist, the goods pass through.

This is likely how the deed goes under the radar, with the aid of a helpful customs officer, and how it was possible for about a hundred Russian vehicles to arrive at the Northeast state forestry.

Express order for Lada Niva and UAZ for four days

The forestry in question announces a public procurement procedure for the purchase of 92 off-road vehicles for almost 4 million leva excluding VAT just a month before the snap elections on April 2 2022, the Public Procurement Registry shows.

The procurement is pided into three specialized positions. Opening the offers was set for April 27. The candidate is only one for all three positions. This is the company Finansiti Ltd. It is registered in Belogradchik and by Octovber 2022 is owned by Evroliz Group AD, part of Evrohold Bulgaria, the Trade Registry shows. Today the company is bought by its CEOs, Assen Assenov and Ivaylo Petkov; Nikolay Kinevski also has ownership.

The proposal by Financiti is to supply 20 UAZ vehicles and 73 Lada Niva’s From this point forward the events unfold rapidly. The commission takes a single day to review the offer, and on the next business day, May 2, opens the price offers of the only candidate. They exceed the projected value of the procurement by about 1 million leva. The indicative price of the procurement was 3,928,000, Finansiti Ltd offers 4,960,838.68

Although the vehicles are Russian and under embargo, and the price is a million over the projected value, the heads of the forestry apparently is in a big hurry. On the next day, a single day after opening the price offers – May 3 – the three decisions for contractor are published (one for each position).

Thus, four business days turn out to be enough for the Northeast state forestry to choose the supplier for vehicles worth almost 5 million leva.

"There are no better cars than the Russian cars"

The company Finansiti, which wins the tender, provides the financial leasing for the vehicles for four years.

It has declared a subcontracted Globul Auto Trade Ltd, which will supply the Niva’s and the UAZ’s. the CEO of the company, Atanas Chalakov told Mediapool on the phone that he has no concerns about the sanctions because the vehicles were imported before the sanctions were imposed.

He explained in length how 80% of the military and forestry auto parks are made up of UAZ’s because, in his words, "there are no better cars than Russian cars". He argued that most of the over 40,000 imported such cars in Bulgaria since 1952, are still in operation.

All this means that spare parts and maintenance are needed, and so the import must continue despite the sanctions, as was made clear by Cholakov’s words. He said that there are ways to do this but did not reveal how.

Usually auto importers do not keep a lot of production in stock. This is why the question as to how Chalakov knew such a large procurement was to be announced, so he could stock up enough vehicles, remains a mystery.

"I very much wanted to have Suzuki but they did not apply"

The director if the Northeast forestry Rady Ivanov told Mediapool on the phone that there were restrictions for applying for the tender. In his words, he had expected applications from Dacia and Suzuki importers, too.

"I very much wanted to have Suzuki Jimni but they did not apply. What can I do?" Rady Ivanov told Mediapool.

The reason for the lacking applications, though, is that other auto importers cannot fit into the price range of the tender. But then it turned out the price threshold is actually not obligatory, as Finansiti’s offer is well above it.

What is more, the Southcentral state forestry has purchased 80 Dacia Duster’s for 40,075 leva excluding VAT each, while the Northwest state forestry – 40 Suzuki Jimni’s for 44,206 leva excluding VAT.

For comparison, the Northeast state forestry purchased its Lada Niva’s for 48,041 excluding VAT each.

It turns out that Lada Niva is more expensive than the Suzuki Jimni that Radi Ivanov wishes he had applicants for. They did not apply because the call for tender had a threshold prices, a requirement, which subsequently will not be honored. In fact, Suzuki are actually having the lowest price of all the all-road vehicles of the forestries (including a four-year leasing and guarantee).

The auto importers commented to Mediapool that at the moment Lada Niva costs about 10,000 euro at the moment on the Russian market, and that price could fall to 8,000 euro for large quantities, and VAT is subtracted. When we add to this a maximum of about 3000 euro for delivery and tax, a Lada Niva should not cot more than 25,000 leva. This is why they recon the price is extremely inflated.

The same goes for the UAZ, whose prices are also very much exaggerated, according to auto importers. The Northeast state forestry purchased four UAZ vehicles, model 2206, for 58,148 leva excluding VAT and 16 more UAZ pickup trucks model 2363 for 79,327.77 leva without VAT. A rough calculation shows that the maximum price of those vehicles with the delivery to Bulgaria could not exceed 35,000-40,000 leva.

The devil is in the details

Another thing that stops importers of Western vehicles to apply for tenders of the Northeast state forestry are the requirements for technical specifications. They include a minimum requirement for the technical parameters of the vehicles.

The Northeast state forestry requires the vehicles to have an "inter-axle differential lock". According to auto experts, whom Mediapool consulted, this is something neither Dacia Duster, nor Suzuki Jimni can meet.

But, in their opinion the UAZ-2363 also doesn’t have an inter-axel differential lock. They explained that the UAZ-2363 has a transfer box almost identical to the Suzuki Jimni, and both can be equipped with a supplemental lock for the rear axle, but technically – neither have the inter-axel lock that is mentioned in the tender call.

This means the winner of the second position in the tender, for supplying 16 new all-road, four-by-four vehicles does not meet the minimum technical requirements of the call for proposals, road specialists say. In their opinion, the candidate should have been disqualified for not meeting the technical requirements, but this did not happen.

The chief of the Northeast state forestry Rady Ivanov said that he has not yet decided if he will ultimately sign the contract with the winner.

Toyota Hilux for the rangers in the South

All other chiefs of state-owned forestries have complied with the sanctions imposed by the EU on Russian machines and have selected Western manufactures of all-road vehicles, as Mediapool confirmed.

The Southwest and Southeast state forestries have gone for Toyota Hilux. Only one candidate applied for the tenders.

The Southwest stet forestry will pay the highest price for its vehicles. It will purchase 70 pick-up trucks Toyota Hilux on a three-year leasing for over 5,24 million leva excluding VAT. This means a single vehicle costs 75,000 leva excluding VAT. The procurement will be fulfilled by OBB Interliyz EAD, who was the only participant in the tender. The contract with the company was signed on April 26 2023, the Public Procurement Registry shows.

The Southeast forestry will purchase the same vehicles for a bit less: The tender is for 45 all-road four-by-four pick-up trucks, and the price for their Toyota Hilux’s comes up to 71,900 leva without VAT. They will also purchase five more Toyota RAV4’s for 64,900 without VAT each, equipped with an automatic gear box. The procurement is won by KBC Leasing Bulgaria EAD, who are the only candidate. The contract for 4,579,983,5 leva not including VAT was signed at the beginning of the year.

KBC Leasing has won tenders for supplying vehicles also for the Northcentral and Northwest state-owned forestries as well, where it is also the only candidate. The vehicles in those, however, are different.

The ball is in the minister of agriculture’s court

A year ago, the Plovdiv Water Supply Company was faced with the same moral dilemma.

Moreover, in this case, the EU sanctions against Russia were not yet imposed.

Even though a contract was initially signed for 15 new UAZ vehicles for 33,500 without VAT – or about 20,000 less than what the tender in question, which took place months later – the contract was dissolved, the Public Procurement Registry shows.

The Bulgarian version of this text can be found here.

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