All 21 public tenders for repairs of existing roads called under European Union operational programme Regional Development, worth a combined 320 million leva, have been cancelled, Dnevnik daily reported on October 23.

The entire road infrastructure development programme has been put on hold until further notice, the new head of the National Road Infrastructure Agency (NRIA), Ivan Atanassov, said. The reason was that there were too many irregularities with the paperwork.

More than half of all contracts, with a combinet worth of more than 120 million leva, were won by companies owned by Vassil Bozhkov. The second most prominent developer is Trace Group of Nikolay Mihailov, with contracts of over 25 million. In third place is Infrastroi, which is a company that is 51 per cent owned by Bozhkov and the remaining 49 per cent belong to the infamous Galevi brothers. Among the winners is also a company formally owned by the wife of a former NRIA head, who is now an aide to the Regional Development Minister Assen Gagaouzov.

Dimitar Ivanov, the NRIA head who resigned last week, was the one to cancel the tenders despite being put under pressure not to do so. He chose to resign rather than overturn his decision, Dnevnik said.

His successor, Atanassov, said that the irregularities were found by an internal audit of the agency and added that the cancellations were not the result of pressure from the European Commission, which has been watching Bulgaria closely and has already suspended hundreds of millions of euro in pre-accession aid in a number of areas over suspicions that the money could be embezzled because of deficient procedures.

The contracts were handed out at the end of 2007 following quick tenders called by Vesselin Georgiev, the disgraced former head of the NRIA, then called the National Road Infrastructure Fund, who had to resign earlier this year after a journalistic investigation found that he gave contracts for more than 100 million leva to a company on whose board of directors he sat previously and where he was replaced by his brother. The EC asked Bulgaria to freeze funds under Ispa pre-accession aid after the row erupted.

Under existing procedures, NRIA can allocate up to 10 per cent of the funding on a contract in advance, with the rest of the money being delivered upon completion. Under some of those contracts, works are close to completion, but there is no longer any certainty that the contractors would receive their money for the work done.

Until now the "gentleman's agreement" was that a company would carry on with the construction under a simple promise and mutual understanding from the road fund that they would be paid eventually in full, Dnevnik said.

Under the same scheme, Bozhkov's companies are currently working on projects involving the construction of Maritsa highway, without their contracts updated. The executive director of Bozhkov's Holding Putishta, Orlin Haldjiyankov, declined to comment when approached by the newspaper.