The 2.2 billion tender for major road repairs did not go according to plan

The Road Infrastructure Agency (RIA) has revived the mega-contract for major road repairs with an estimated value of over BGN 2.2 billion. It was launched at the end of October 2024, but only now – a year and almost four months later – out of a total of 46 bids submitted in nine regions of the country, only five price bids in three regions have been opened.

The Public Procurement Register (CAIS) does not contain any evaluation committee reports. It is unclear why prices have been opened in certain regions but not in others. There is also no information about technical proposals, their evaluation, and the entire tender process.

Our team sent questions on the subject to the Road Agency. They indicated that all documents related to the procedure will be uploaded to the CAIS with the decision on the selection of a contractor after the Evaluation and Classification Commission has completed its work.

According to the terms of the contract, the Road Infrastructure Agency must conclude framework agreements with three potential contractors for each of the nine regions. The idea behind this model is for the Road Agency to invite the three companies with which it has already signed agreements to subsequently offer prices for each specific project and compete with each other.

However, the results of the open price proposals call into question the achievement of the set goals. In the regions where there is movement on the contract, only one or two candidates were admitted before the opening of the price proposals.

We asked whether the tender would be completed despite the situation with fewer participants and open bids for different positions. The RIA did not give a specific answer, but stated that "all documents related to the procedure, prepared after the evaluation of the participants in the separate positions, will be published in the Central Public Procurement Information System (CPIS) with the decision of the contracting authority to terminate the procedure."

We would like to remind you that the tender was announced during the term of the acting regional minister Violeta Koritarova in one of the last acting governments of "Glavchev." It is for major repairs over a period of four years and even then raised many questions – on the one hand because of its quiet launch, and on the other because of the new conditions, which suggested only apparent competition between the participants.

Despite the high requirements for turnover and previous experience, the minister in charge, Violeta Koritarova, justified the launch of the tender with the project readiness for major repairs of the Road Infrastructure Agency.

Forty-six companies submitted bids. In early April 2025, Regional Minister Ivan Ivanov (BSP) from the Zhelyazkov government announced that some of the upcoming major repairs would be carried out after the completion of the procedure for selecting contractors for the nine regions of the country.

However, there has been no progress since then.

Where is there progress on the order and where is there none?

The CAIS shows that the price proposals for three regions were opened on February 11. These are Region 2 – OPU-Blagoevgrad, OPU-Kyustendil, OPU-Pernik, Region 5 – OPU-Razgrad, OPU-Ruse, OPU-Silistra, OPU-Targovishte, as well as Area 8 – OPU-Haskovo, OPU-Kardzhali, OPU-Stara Zagora.

For the remaining 6 areas out of a total of 9, price offers have not been opened. These are:

• District 1 (Vidin, Vratsa, Montana);
• District 3 (Burgas, Sliven, Yambol);
• District 4 (Varna, Dobrich, Shumen);
• District 6 (Pleven, Veliko Tarnovo, Gabrovo);
• Region 7 (Pazardzhik, Plovdiv, Smolyan);
• Region 9 (Lovech, Sofia).

A total of 37 bids have been submitted in these regions by large consortia and independent players, but the CAIS lacks information on the status of these bids.

When asked why there are no open price offers for these positions, the RIA replied that the participants' proposals for the specified positions are being evaluated by the commission, and that a decision to conclude the procedure will be issued after the commission has completed its work.

Area 2: OPU-Blagoevgrad, OPU-Kyustendil, OPU-Pernik

For Area 2, with a length of 1,755 km, three participants have submitted bids:

• Consortium "Strabag BR" DZZD, with participants "Strabag" EAD and "Construction and Repair Company ARL Cluj S.A.";
• "Groma Hold" EOOD;
• "European Roads" AD.

However, the CAIS only lists price offers from the latter two participants, which most likely means that the consortium around Strabag was eliminated at the technical proposal stage. The specific omissions (if any) will only become clear once the minutes of the commission's work have been uploaded.

Unlike standard orders, where a total amount is offered for the entire project, here the bids are structured as a sum of unit prices for specific activities. Since the RIA has not yet determined exactly which roads will be repaired, companies are giving unit prices "per piece" – for example, for one cubic meter of excavation or one ton of asphalt. The total value in the bids (the recapitulation) is more of a theoretical figure for ranking purposes, but the unit prices themselves are what the state will pay for the actual repairs over the next four years.

They are divided into five main accounts:

• Account 1 – Earthworks with unit prices;
• Account 2 – Road works with unit prices;
• Account 3 – Asphalt works with unit prices;
• Account 4 – Repair works on facilities at unit prices;
• Account 5 – Water pipes, power lines, and telecommunications at unit prices.

For Area 2, the situation regarding price proposals reveals two important aspects – the transformation of participants into consortia and the extremely close financial estimates between them.

Although the participants were declared as independent legal entities in the initial submission of documents and in the first entries in the CAIS system, the price offers reveal a different reality. Groma Hold EOOD, which initially appeared alone, actually submitted its price offer on behalf of DZZD Groma Hold – Nivel Stroy. The same is observed with Evropaiki Pishta AD, whose bid was submitted on behalf of the consortium Pishta Yugozapad 2025. However, it is unclear which other companies are in the consortium.

An interesting parallel can be drawn between the specific unit prices offered by the two associations. They are broken down into the five main accounts that will serve as a basis for any future award:

• Earthworks: The two companies have offered almost identical amounts – around BGN 1,902 excluding VAT, with a difference of only 7 stotinki between them;
• Road works: This is where a large part of the expenditure is concentrated. The consortium around Groma Hold has set a price of BGN 49,853.12, while Patiša Yugozapad 2025 offers BGN 49,854 – a difference of less than one lev;
• Asphalt works: Groma Hold offers BGN 2,201.11, which is BGN 7.95 more than their competitor's offer (BGN 2,193.16);
• Repair works on facilities: For bridges and viaducts, the offers are again very close – BGN 23,839.52 and BGN 23,832.72, respectively.
• Communications and facilities: For water pipes and power lines, the amounts are BGN 16,404.10 and BGN 16,497.43, respectively.

In the final recapitulation (the sum of these unit prices), the two offers differ by only BGN 79.53, with a total value of over BGN 94,000.

In addition to the direct prices for activities, the two companies have also set absolutely identical additional parameters that will form the final price of each repair:

• Hourly labor rate: Both companies have set a rate of BGN 15 per hour;
• Additional labor costs: The maximum 100% has been charged;
• Mechanization costs: Both participants have set a rate of 50%.Delivery and storage costs: These have been set at 15%;
• Profit: Set at the ceiling of 10%.

These data show that in District 2, the competition will be decided by minimal differences, and RIA will have to choose between two offers for future major repairs, which are almost mirror images of each other in structural and financial terms. And all this is only assuming that this separate position is pursued to the end, given the condition in the tender for signing framework agreements with three participants.

Area 5: OPU-Razgrad, OPU-Ruse, OPU-Silistra, OPU-Targovishte

In Area 5, the situation is even more challenging in terms of the competition set out in the tender. Here, unlike the other positions, only one participant's bid reached the final phase with the opening of prices, even though two large consortia initially expressed interest:

DZZD "Varna - Razgrad" (with the participation of "Autostrade - Black Sea," "Geostroy," "Patrostroy-92," and "Isa 2000"); and

Consortium "Road Repairs North 2024," with participants "Patinjeneringsstroy-T," "Pattperfekt-T," "Pati" AD, "Viastroy," "Road Construction - Veliko Tarnovo," and "Patinjenerings." These are all companies directly or indirectly linked to construction boss Veliko Zhelev.

Only this consortium's price offer has been opened. The other one has been dropped, but for now it is unclear for what reasons. This leaves the RIA in a delicate situation – with a requirement for a framework agreement with three companies, in Region 5 there is effectively only one candidate.

The price offer shows significant values in the individual items:

• Earthworks: The amount of BGN 2,129.90 excluding VAT is set;
• Road works: The value here is BGN 60,795.79;
• Asphalt works: The amount is fixed at BGN 3,975.88;
• Repair works on facilities: This is the most impressive item in the offer - BGN 216,833.88. For comparison, in District 2, the offers for the same activity are around BGN 23,000, which makes the offer here nearly ten times higher;
• Communications and facilities: The proposed price is BGN 15,323.38.

The total recapitulation of unit prices for District 5 amounts to BGN 299,058.83, which is nearly three times more than the total amounts proposed in the other districts with open bids.

When analyzing the price-forming indicators of "Road Repairs North 2024," high levels of additional charges are observed:

• Hourly labor rate: BGN 15 per hour;
• Additional labor costs: Maximum 100%;
• Additional mechanization costs: Here, the consortium has set 100%, while in other areas this percentage varies between 40% and 50%. This means twice as high costs for machinery when performing the tasks;
• Delivery and storage costs: 10%;
• Profit: Set at the ceiling of 10%.

If the RIA signs a framework agreement with this participant alone, it will find itself in the position of sole contractor for the next four years at unit prices (especially for facility repairs) that are several times higher than those in southwestern or southern Bulgaria.

Region 8: OPU-Haskovo, OPU-Kardzhali, OPU-Stara Zagora

The situation in Region 8 is dynamic, as this is the region with the greatest initial interest – a total of 6 bids were submitted. These were:

• Parsec Group EOOD;
• Consortium Strabag BP DZZD, with participants Strabag EAD and Strabag Sp.z.o.o;
• DZZD Kardzhali-Haskovo-Stara Zagora, with participants Geostroy AD, Puttstroy-92 AD, Avtomagistrali - Chernomore AD, Isa 2000 EOOD, and Zebra OOD;
• DZZD "Republican Roads AIB", with participants "AB" AD, "Infra Expert" AD and "Bitumina GmbH - Bulgaria" EOOD;
• DZZD "Roads Region 8 2025", with participants "Trace Group Hold" AD, "Trace BG" EOOD, "PSP Stroy" AD, Road Maintenance-Sliven EOOD and Construction Company Put Stroi Invest EOOD;
• Association Stara Zagora, with participants Burgasputstroy AD, Novako Stroi EOOD and Todini Costruzioni Generali S.P.A.

However, at present, only two consortia have reached the stage of open price proposals, which again raises the question of how RIA will meet the requirement to select three contractors. These are:

• DZZD "Republican Roads AIB", with participants "AB" AD, Infra Expert AD, and Bitumina GmbH - Bulgaria EOOD;
• DZZD Roads Region 8 2025, with participants Trace Group Hold AD, Trace BG EOOD, PSP Stroy AD, Road Maintenance-Sliven EOOD and Construction Company Put Stroi Invest EOOD.

Compared to Region 5, the unit prices here are lower, but there are significant differences between the two competitors in certain items:

• Earthworks: DZZD Republican Roads AIB offers BGN 1,319.02, while DZZD Roads Region 8 2025 offers almost double that amount – BGN 2,364.89;
• Road works: The difference here is nearly BGN 13,000 – BGN 35,488.12 versus BGN 48,642.08, respectively;
• Asphalt works: In this item, the bids are almost equal – BGN 2,019.56 and BGN 2,002.55, respectively;
• Repair works on facilities: The offers are close – BGN 26,486.41 versus BGN 28,725.81;
• Communications and facilities: Here, the difference is again double in favor of the higher offer – BGN 11,023.43 versus BGN 22,733.00.

The final recapitulation of the sum of these unit prices is BGN 76,336.54 for AIB versus BGN 104,468.33 for the consortium around Trace.

Area 8 stands out with the highest estimated costs for labor and mechanization compared to the areas analyzed so far:

• Hourly labor rate: Here we see the highest levels – BGN 16.20/hour for AIB and as much as BGN 17.50/hour for Roads Area 8 2025. By comparison, in Area 2 and Area 5, the rate is a fixed BGN 15/hour;
• Additional costs for mechanization: For "AIB" they are only 40%, while for their competitor they are twice as much – 80%;
• Delivery and storage costs: Here, "AIB" bets on 20%, while "Roads Region 8 2025" offers 12%;
• Profit: Both participants have set a limit of 10%.

In this area, RIA has two participants whose bids show different strategies – one bets on lower unit prices for activities but higher delivery and storage costs, while the other offers more expensive labor and mechanization. However, the problem of the lack of a third participant remains valid here as well, which calls into question how the idea of three-way competition will be implemented in future repairs in these areas.

Translated with DeepL.