Karadzhov canceled the order for 10 biodiesel trains

The Ministry of Transport and Communications (MTC) officially terminated the large-scale public procurement contract for the delivery of 10 new biodiesel trains, worth over €248 million (BGN 485 million) excluding VAT. The main reasons are related to the fact that only one bid was submitted, but also to the lack of secured funds.

The decision to terminate the tender was signed by the outgoing Minister of Transport, Grozdan Karadzhov. The document, together with the reports and minutes of the evaluation committee's work, was uploaded to the Central Administration Information System (CAIS) on January 14 this year. However, the fate of the procedure had already been decided before Christmas, according to a reference.

We recall that in June last year, Karadzhov announced that Bulgaria would purchase 20 biodiesel trains. However, in July, the ministry launched a procedure for 10 trains, but without secured funding for it. The tender provided for 15 years of maintenance and an option to purchase 10 more machines by the end of 2027.

The initial deadline for submitting bids was July 31, after which it was extended to August 11. On August 12, when the bids were opened, it became clear that only one company was interested – Slovakian ŽOS Vrútky a.s.

They offered €67.4 million (BGN 132 million) for the delivery of the first 10 railcars alone, which was BGN 8 million below the set limit for this activity. The price for scheduled maintenance was €2.55 (BGN 4.99) per kilometer traveled. The total value of the bid could not be calculated because the price for scheduled maintenance depended on the kilometers traveled over a 15-year period.

From the opening of the bid until December, there was no movement on the order.

Reasons for termination

Internal reports from the commission reveal that the Slovak company ŽOS Vrutky was a good candidate. The participant had proven annual turnover and presented evidence of successfully completed contracts with Slovak State Railways. Furthermore, the Commission officially ranked ŽOS Vrátky in first place, confirming that their bid met all technical and economic criteria.

However, instead of a contract, the company received a rejection. The Ministry of Transport's reasoning is based on Article 110 of the Public Procurement Act, which gives the contracting authority the right to terminate the procedure when only one suitable bid has been submitted. According to the ministry, the lack of competition does not guarantee the best market price, even though the Slovakian offer was lower than the forecast price.

Concluding a contract as a result of a procedure with a single participant, when there are a larger number of potential and interested contractors on the market, means that the contracting authority has not compared at least two suitable bids in order to select the most economically advantageous one and to comply with the objective of the Public Procurement Act to ensure the efficient use of public funds," the decision states.

It adds that "the existence of a single tender also ultimately leads to a violation of the principle of free competition, because an important element of the objective of the public procurement procedure is missing, namely competition and rivalry between more than one tender, including price competition, in order to maximize the satisfaction of the contracting authority's interests and the effective spending of public funds."

The public interest would be better protected by terminating the public procurement and conducting a new one in order to achieve optimal market offers."

In fact, it is not uncommon for contracting authorities to sign contracts with only one participant who has submitted a bid, so the lack of competition that is being discussed is hardly the only reason for terminating the procedure.

The more likely reason is financial. The final decision to terminate acknowledges something that was known from the outset – the Ministry of Transport's budget for 2025 does not include funds for this purchase.

In 2025, the budget of the Ministry of Transport and Communications does not include funds to finance a public procurement contract for: "Delivery, commissioning, staff training, and maintenance for a period of 15 years of 10 single-deck multiple units capable of running on hydrotreated vegetable oil (HVO) at a minimum speed of 120 km/h for the needs of rail transport."

The lack of a budget for 2026 and the fact that the state is operating with an extended budget are cited. Thus, the ambition for a "green revolution" in BDZ collided with the reality of deteriorating state finances during the Zhelyazkov cabinet.

The Slovak company may appeal to the CPC within 10 days.

Translated with DeepL.