The interview with the former head of NEC is extremely indicative to all those following closely events in the energy sector. Along with the resentment from his dismissall, Mr. Iliev shares insights that the audience rarely hears.
Few would be surprised that he has been under pressure in the past and at present, including by the employers’ organizations, insisting on this removal. This has been cleverly used by the Movement of Rights and Freedoms, seeking to conceal behind the scene maneuvers with public legitimization. It has become obvious, that while determining the weighted average interest in the employers’ organizations, the interests of the electricity traders are taken to heart.
It is also crystal clear that the dismissal of Peter Iliev comes on the direct orders from the Prime Minister as he is the only one that can supersede Minister Petkova’s reluctance to part with one of the few people that has managed to remain largely out of the corruption schemes. He appears to have limited his involvement to the bare minimum needed for him to operate. However, it seems that in time he has angered those with the insatiable appetite for corruption related gains.
What did Peter Iliev say?
He pointed to the obvious fact – the energy sector is in a complete chaos, with key players focusing on individual salvation at the expense of systemic interests, the comprehensive remedial action for sustainable recovery of the state energy sector, the accumulation of essential crisis buffers, and investments in reforms and restructuring. The predators strike in day light with dedicated hits.
The key news bomb, in his improvised press conference, is that the locally produced “cheap energy”, that keeps prices down internally, goes for export. Just this sentence alone suffices it to grasp the depth and force of the upcoming quake.
“Cheap” electricity is a coined phrase to describe the electricity produced from Kozloduy NPP, whose board, the current new CEO of BEH, Jacklen Cohen, used to chair. It is where, according to Petar Iliev, the “fixed” auctions happened with pre-determined winners. Although the former boss of NEC spares names – the ‘lucky’ traders are known – most of them related to the Kovachki and Peevski groups. There are others traders, but they operate in the shade of the two “major” energy clans. The whole operation enjoys the cover of the Attorney General’s office, guaranteeing them virtual immunity.
Most of what happens as specific actions, should qualify under most of the articles of the Penal Code, and short of personal guarantees by the AG, any prosecutor could jump on the case and investigate. The leading and only candidate for replacement of the man at the top of the prosecution – Ivan Geshev – will surely persist on with the old schemes and dependencies.
Peter Iliev does not mention names as he is probably afraid for his life. Whenever in the past it has come to the ‘cheap’ electricity of the Kozloduy NPP – people have suffered, often killed and the chronicles of the ‘deceased’ keep piling up.
The explicit reference that Peter Iliev makes to the past record of the new CEO of BEH in the Oresharski government is a direct link to his past in the Multigroup and the Dogan circles. By the standards of the Bulgarian media and the state administration environment in general, this also qualifies as a true revelation. It is no coincidence that the European Investment Bank refused to lend a previously agreed loan to the Greece-Bulgaria interconnector, while the main shareholder in the ICGB is led by a Multigroup-MRF affiliated person. The reasoning is extremely clear and categorical – high personal risk. I’m sure, the decision makers behind Jacklen Cohen’s return to power at the helm of the Bulgarian state energy did not factor in this part in the management equation. In all probability, they did not care either. For most of them – the fate of the interconnector is of no relevance – should it not happen, the better.
Worth noting is that the aftershock from Petar Iliev’s press conference, did not only cover BEH’s new CEO but one more “hero” from Oresharski’s Multigroup times – Ivan Yonchev, who replaces him at the top of NEC. To sum it all up – Dogan, Peevski and Kovachki now enjoy total and unshared control over Bulgaria’s energy sector. The new CEO of NEC’s promotion is a reward for his loyalty to the ‘gang’ and the ‘correct’ deals with the cheap electricity from Kozloduy NPP. In 2014, Yonchev was the top manager on the Bulgarian side in the South Stream Bulgaria company. Then he made this shocking confession, “For us the South Stream (priority of Russia) is more important than the interconnectors (priority of the EU)”!? One can only speculate as to the limits of his zeal to see other Russian projects in Bulgaria prosper, including the NPP Belene and a new gas power generation that would utilize piped natural gas coming from the Turk Stream.
Enjoying such a level of full control over the state energy sector, the oligarchs can at any time topple the government. A typical scenario would imply a crisis, with all of the public anger channeled to the government, which is finally forced to resign after people start protesting on the streets. The most these ‘gang’ leaders could risk with the insurance policy of the Attorney General, is to retire an appointee at the helm of the state owned energy company. But sooner or later, their cadres always come back on their previous postings or are promoted further up. A typical feature of cadres’ development in the energy sector is that all major appointments are confined to a limited circle of people on the white list of the stakeholders.
Once again, Minister Temenuzhka Petkova who had dismissed Yonchev before for “failure to perform” has her will totally ignored, forced to swallow back her pride. Which is one more indication of the ongoing subsurface turbulence, which makes people ask her a simple question – is it worth remaining in this post? She is being treated as a front face, a façade. There is no one to back her actions, the prime minister decides behind her back, striking deals with the real kingmakers – the Peevski-Kovachki group.
If you happen to be wondering what is the definition of a mafia – read the improvised interview of Petar Iliev.
It’s not that hard to figure out why the schemes spin around the cheapest electricity – the profit margins are the highest, tens of millions per transaction.
If this happens on such a grand scale, then one should wonder why the authorities cast a blind eye on in flagrant and systemic non-compliance of the owner of the largest polluting power generation unit in the energy sector which burns garbage imported from Italy, trespassing all EU and Bulgarian the rules and laws. Italy is saving up on its carbon footprint, while Bulgarian consumers foot the bill.
If the “cheapest” electricity in the Bulgaria’s energy system had been added to the energy mix, the average electricity prices in Bulgaria would have fallen, but then so would profit margins for the intermediaries. The electricity traders follow basic market instincts – with zero empathy to the poorest consumers in the EU. Poverty is a not naturally born phenomenon in Bulgaria, it is a product of man-made dispossession and redistribution of incomes. Ultimately these end up with corrupt top businessmen and politicians like Peevski and Kovachki who are then covered by the Attorney General. Employers and their organization are fully cognizant of the high electricity price problem origon, but they prefer to keep a low profile or pick soft targets like Petar Iliev, fearing raids from the NRA or the prosecutor’s office.
While the private power generation and traders’ companies belonging to Dogan and Kovachki enjoy full immunity, the National Electric Company and the state energy companies are decapitalized. The media close to the government never dig deep into the dark sides of the operations of Dogan’s or Kovachki’s TPPs, fearing defaults on their long overdue loans.
The scope for further destruction is unlimited, while the end of the ministership of Temenuzhka Petkova is a matter of time. It seems that PM Borisov has also raised the white flag. There can always be a ready-for-the-press explanation – Dogan’s MRF has promised to broker a deal with the employers, and to keep Borisov in power at least until November.
In the meantime, the big parties will receive due election funding from the oligarchs.
We should also give credit to Petar Iliev for exhibiting the total irrelevance of the cold reserve. For all the ado around it, ultimately this bogus system boils down to a hidden form of government subsidy to Kovachki and Dogan. Here is the crux of Iliev’s revelation – all accidents and power shortages of the largest single generation unit – Kozloduy NPP – have been covered not by the cold reserve power plants, but by the working horses in the state TPPs and HPPs. The cold reserve plants, receive more than BGN 52 million a year, by order of Minister Petkova, while the NEC plants, including the state TPP ” Maritsa-East-2 “, which have been devoid of the cold reserve cash, spend their scarce resource remaining on a standby. Iliev makes this crystal clear: “Some get paid, others do the work.”
As I have mentioned, the government seems to be in a free fall mode and a collision is inevitable. At this pace of erosion, it is not at all certain that the whole edifice won’t collapse much sooner in a black swan event.
The AG designate Ivan Geshev warned the public not to be mistaken that the prosecutors, i.e. Peevski and Dogan will defend their territory by all “legal” means. Whether they are legal or not depends on the interpretation of the prosecutors. Both the knife and the bread are in their hands. The cash too – including this from draining the power sector, which accumulates with the oligarchs, and then finds its way to the pockets of certain prosecutors – the circular economy of corruption.
Apparently the kingmakers have decided to scrap Borisov, but for now they will keep him in power for several months, humiliating him in public.
Hope is evasive as the designated opposition – Ninova or Radev – seem to be happy to step in the shoes of the late Borisov. See how the Anti-Corruption Commission cleansed the President of allegations of conflict of interest – for paying his future spouse for two jobs while being a state official and the ruling of the ACC was that he had ‘no private interest’ ?!
Cartagena must fall – all this rotten construction of corrupt power must collapse, or else Bulgaria is doomed.