Can a minister stop a key energy project and then have his ministry lie that he never did it? It can, and the evidence for this is now available in black and white.
We are talking about the Minister of Energy Rosen Hristov and the completion of the gas connection with Greece, which Bulgaria hopes to free itself from dependence on Russia.
At the beginning of August, “Capital” announced that the Acting Minister of Energy had canceled key appointments in the project company of the gas connection with Greece. This put the plan to get the interconnector up and running on time at risk. At the time, the Ministry of Energy denied that the minister had canceled the appointments.
However, Free Europe obtained documents which show that in fact the minister did just that.
On his first day as Acting Minister of Energy Rosen Hristov has reversed the decision of his predecessor in office approving the appointment of members of the Supervisory Board of the company with state participation ICGB (ICGB), which is responsible for the management and operation of the interconnector with Greece.
The appointments were a key condition for the company to obtain a gas transmission operator’s license and bring the pipeline into commercial operation. Their cancellation put at risk the gas connection plan to supply Azeri gas from the beginning of the next heating season.
Ultimately, the appointments were confirmed and entered in the Commercial Register as approved by the previous Minister of Energy Alexander Nikolov. This came after the information about the canceled appointments was made public and citizens protested demanding that the completion of the interconnector not be delayed.
The caretaker government does not admit that the energy minister tried to stop the appointments.
However, Free Europe has received official documents and they show that this is exactly the case. The Ministry of Energy explained the decision as an attempt to correct a mistake and added that no action was taken to implement it. It turned out that there was no mistake. At least not exactly where the ministry claims.
“There is neither an order nor a decision”
On August 5, three days after the inauguration of the caretaker government appointed by Rumen Radev, it became clear that the commissioning of the gas connection with Greece may be delayed because of certification hurdles.
The project company ICGB confirmed to Free Europe that key changes in its management were refused to be entered in the Commercial Register. A discrepancy in the spelling of the name of one of the members was cited as the reason Administrative board from the Greek side – in the documents his name was written once as Georgius and once as George.
The company indicated that it was a discrepancy that was “easily overcome”.
At the same time, the journalist Ivaylo Stanchev from “Capital” announced, referring to three of its sources, that the Acting Minister of Energy Rosen Hristov has canceled the decision of his predecessor in the post, which approved the appointment of the members of the new Supervisory Board of the project company. Such a decision would set the whole procedure back.
The Ministry of Energy denied that the caretaker minister canceled the ICGB appointments and described the publication as “fake news”.
We categorically state that Energy Minister Rosen Hristov has in no way canceled the appointments in ICGB AD.
“We categorically state that Energy Minister Rosen Hristov has in no way canceled the appointments in ICGB JSC”, it was written in the ministry’s position, sent to the media on August 5. The institution indicated that “there is neither an order nor a protocol decision to stop the registration” and that the refusal for it was from the Registration Agency.
Subsequently, “Capital” published a protocol received from its sources, which shows that Hristov overturned the decision of his predecessor, but not what the overturned decision says.
However, there is a solution
Free Europe requested both protocols under the Freedom of Information Act (FOIA). From the documents received, it can be seen that Minister Rosen Hristov canceled this very decision of the Minister of Energy in the government of Kiril Petkov, which approved the composition of the new Supervisory Board.
On July 22, 2022, the former Minister of Energy Alexander Nikolov issued two decisions (available here) for the ICGB structure. With the first, he approves the new management structure of the company. With the second, it approves the election of six members of the newly created Supervisory Board – three people from the Bulgarian side and three people from the Greek side.
This is exactly a key detail in this story – there is both a Management Board and a Supervisory Board.
The new management structure of the project company is a condition for it to be certified as an independent gas transmission operator. This condition is contained in the decision for national energy certification regulators of Bulgaria and Greece KEVR and RAE and is in compliance with European requirements for the structure of independent gas transmission operators.
These rules provide for operators to have a two-tier structure, the energy expert told Free Europe Martin Vladimirov from the Center for the Study of Democracy (CSD). The aim is to ensure independent decision-making.
In the case of ICGB, the two governing bodies are the Management Board and the Supervisory Board.
“These are standard regulatory procedures related to the certification of any gas transmission operator,” said Martin Vladimirov.
“There is no way for a gas transmission operator to function on the territory of the EU, without it fulfilling these requirements of the European regulations.”
By own decision (available here) from August 3, 2022, however, the Acting Minister of Energy Rosen Hristov annuls the decision to approve the composition of the ICGB Supervisory Board.
“This de facto cancels the entire procedure,” commented Martin Vladimirov.
I don’t know how to objectively explain it other than as pure sabotage.
Thus, the decision of the caretaker minister to cancel the appointments, which was not accompanied by any reasons, called into question the plan to put the gas connection into operation before the start of the heating season. The reason is that July 30, 2022 was specified as the deadline for changing the company’s structure.
“I don’t know how to objectively explain it other than as a pure sample of sabotage,” added Vladimirov.
Then the Ministry of Energy accused the management of the project company of submitting the registration documents too late – one day before the deadline and of making “glaring mistakes” in the spelling of the name of one of the members of the Management Board. However, this is not true.
In this case, we are talking about two different things. The mistake was made when writing the name of a member of the Management Board. This is the reason for the Registration Agency to refuse to enter the changes in the manual in the Commercial Register. According to the ICGB, it is technical and easily fixable.
However, the Minister of Energy cancels the appointments of members not of the Management Board, but of the Supervisory Board. Subsequently, the new members were entered in the Commercial Register with the same names with which they were written in the previous minister’s decision on their appointment.
“This decision has not been moved”
Despite the obstacles, the ICGB has a new manual since mid-August, which has already been entered in the Commercial Register.
The decision of Minister Rosen Hristov canceling the appointments to the Supervisory Board of the project company was not entered, it is stated in the decision by which the Ministry of Energy provided Free Europe with the requested documents, signed by the chief of staff of Minister Lyubomira Gancheva. She is a member of the ABV party founded by President (2002-2012) Georgi Parvanov and in 2018 she was in Moscow for the signing of a memorandum of cooperation with the United Russia youth organization. It is the party founded by President Vladimir Putin that governs Russia.
Svobodna Europe asked the spokeswoman of the Minister of Energy what is the reason in its position regarding the publication of “Capital” that the Ministry claims that the Minister did not cancel the appointments in the ICGB, while the documents show otherwise. According to her, the reason is that the decision “has not been moved at all”.
The spokeswoman said the minister’s decision was issued to correct an error with the misspelled names of a member of the company’s management. She added that after the Registration Agency gave guidelines on what needs to be corrected, no action was taken to implement Rosen Hristov’s decision.
If he [министърът] really intended to change the Board of Directors or the management, this thing could be done.
Even then, the Ministry of Energy and the ICGB pointed out that the error was when writing the name of a member of the Management Board, not the Supervisory Board. In addition, the names of the members of the Supervisory Board are now entered in the Commercial Register in the same way as in the previous Minister’s decision approving their appointment.
“It turned out that the documents were not wrong with us, and that’s why this decision was not moved”, she commented in response.
“If he [министърът] really intended to change the Management Board or the management, this thing could have been done”, she said and added that the subsequent actions of the ministry showed that there was a “desire to make things happen”.
The caretaker government has declared the completion of the gas connection with Greece as its priority, but allowed that it might be delayed. As a reason, he indicated that there are still unfinished works in the construction.
Energy Minister Rosen Hristov and Economic Deputy Prime Minister Hristo Alexiev went for an inspection and then said that there is no natural gas in the interconnector and it is not ready. The project company and energy experts refuted this claim and showed, that there are test quantities of natural gas in the pipe, which means that it is ready for use. In order for the interconnector to become operational, it must receive Act 16. To date, this has not happened.
At the same time, the caretaker government refused six of the seven tankers of liquefied gas from the US and announced that it would start negotiations with Gazprom to resume natural gas supplies. The Russian state company unilaterally and in violation of the contract stopped supplying gas to Bulgaria after the country refused to pay in rubles instead of the currency stipulated in the contract.
The Greece-Bulgaria interconnector is key to the diversification of natural gas supplies in Bulgaria and to breaking dependence on Russian natural gas. When it enters commercial operation, it will allow the full quantities of the natural gas contract with Azerbaijan to be supplied to Bulgaria and will enable gas to be supplied from the LNG terminals in Greece. The capacity of the interconnector is 3 billion cubic meters per year – approximately the same as the annual consumption of natural gas in Bulgaria.
The construction of the interconnector with Greece was completed 13 years after the idea of its construction was announced. Construction itself began after a long delay in 2019, and the completion of the project was postponed several times during the last administration of Boyko Borisov.