Банкеръ Weekly

Briefs

HOW IS A EUR3MN PROJECT RUFFED?

In only four months and a half the subscription fee for cable INTERNET services may go down almost six-fold. This means that prices of that service, which are currently in the range of BGN20-60/month could drop to BGN4-10/month. However, this is the smallest extra in an ambitious project, the first stage of which realization should be completed by end-March 2004. The project was launched on April 4, 2003, when two things were done at a time. An agreement was signed between the Bulgarian state-run company Informational Services AD, the private German firm Nord Alliance, and the Liechtenstein-based El-Sat for joint work on the establishment of a satellite communciation network for delivery of public telecom services on the territory of Bulgaria, which are presently provided only by the domestic monopolist, the Bulgarian Telecomminications Company (BTC). In April 2003 a consortium was set up for the purpose between the three companies, called CITS. The idea is that the foreign partners would ensure the money for the supply of necessary equipment - more than EUR3MN - and Informational Services AD would participate in the project's implementation by its experts, maintaining the future satellite network. The expected annual turnover on its commissioning has been calculated at BGN6MN, and more than 40% of the profit has been earmarked for reinvestment Under the agreements, the equipment should be supplied by plants of …ЂDS (European Aeronautics, Defence and Space) - the biggest European company in the sphere of aviation, space and defence production, uniting the national aviation and space industries of France, Spain and Germany. According to projections, by the end of 2004 the communication network should cover the entire Bulgarian territory with more than 400 satellite terminals. As experts in the branch specify, in addition to the drastic reduction of the price for INTERNET access, the project will also make possible the establishment of corporative networks, servicing firms with branches round the country. Presently, the monthly fee for such a convenience offered by BTC is in the range of BGN5,000 - at that for ensuring a single link between two points at a speed of 1 megabyte/second. Insiders of Informational Services AD claim that the satellite communications network will allow linking 15 to 20 points for the same amount of money. Moreover, it will make possible videoconferent connections both on Bulgarian territory and abroad. The consortium CITS has also closed a contract for strategic cooperation with the Austrian state-run Telecom. Everything seems fine up to here. The bad development came this autumn in connection with quite a routine public procurement procedure, around which a Bulgarin type of scandal could be smelt. On September 2 the Finance Ministry invited a tender for the construction of a satellite network for reservation of the Customs Agency communications, i.e. for additionally securing its functionality. The deadline for submission of offers was fixed at September 17, and September 20 was the date for their opening. On the same date the names of the bidders became public through the mass media, in violation of the Public Procurement Act, which does not allow leakage of confidential information prior the opening of envelopes with the offers. Thus, it became known that the bidders were three: the Bulgarian company Transsat, the German Planexis, and CITS, registered in Bulgaria on September 9, 2003. In the latter, whose name is the same as the above-mentioned consortium, Informational Services AD does not participate, but its employees have been included in the company's management bodies. This circumstance feeded a series of publications, alleging that the tender had been discredited and there was a conflict of interests. It was pointed out that Informational Services AD chose not to particiapte directly in the contest, invited by its principal - the Finance Ministry - and hid behind the newly established company. Nord Alliance holds 80% in it and the balance of 20% is owned by El-Sat, a subsidiary to LTN Tele Net - the state-run telecom of Liechtenstein, that is, the same two companies which participate in the CITS consortium. Most of the attacks were directed to El-Sat, which was called a POBox company, having nothing in common with the telecom of Liechtenstein, as nobody answered at its official address. This week the Chairman of Nord Alliance and member of CITS AD BoD Klaus Muller was on a business visit in Sofia. The BANKER weekly asked for a meeting with him in order to get answers to some importants questions. Firstly, who's who in the joint-stock company, registered in Bulgaria on September 9, bidding for the Customs Agency order. And secondly, would the scandal stop the project for the establishment of a satellite network, alternative to that of BTC? The meeting with Mr. Muller was held in the German Embassy in Sofia.

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