The state cancels the 100 million contract with GBS for the children’s hospital

The state cancels the 100 million contract with GBS for the children’s hospital
The state cancels the 100 million contract with GBS for the children’s hospital

The state has taken real steps to cancel the 100 million BGN contract for the construction of a children’s hospital with the association of companies around “Glavbolgarstroy” – “Children’s Health” and has demanded the return of the transferred advance in the amount of 9.2 million BGN. The one-month written notice was sent on August 18 of this year. and expires in a matter of days, the Ministry of Health told Mediapool. The GBS said that they are conducting official correspondence with the Ministry of Health and will refrain from comment until it is completed. The company does not indicate whether they will make claims to the state, nor what activities they performed under the contract. According to lawyers interviewed by Mediapool, GBS can make claims for lost profits, for work performed, for reputational damage, etc. There are no liquidated damages in the contract, but the company can still claim damages.

At the same time, for 2 years, the state investment company, which manages the project for the construction of the children’s hospital, has absorbed BGN 760,000, without making any substantial progress. Although the implementation of the project was delayed while the changing managements of the Ministry of Health wondered how to continue it, the board of directors of the state investment company received salaries in the range of BGN 2,800-8,500.

Abandonment of the declared impossible project

The cancellation of the contract with the association of companies around “Glavbolgarstroy” (GBS) is a key step towards the final “break” with the declared impossible project to build the children’s hospital on the site of the unfinished construction in the courtyard of “Alexandrovska Hospital”. This will allow a restart of the project, for which a public and political consensus has been formed. In the summer of last year, the office came to the conclusion that the project for the children’s hospital cannot continue as a reconstruction of the old building in the courtyard of the Aleksandrovsk hospital, and the construction of a completely new building cannot be done within the framework of the existing public contract, i.e. is. the project in its form is unworkable.

The actual steps to cancel the contract, however, have been delayed and come more than a year after the first request to do so, made by Acting Health Minister Stoicho Katsarov in July 2021.

Project timeline

Through July 2019 Minister of Health Kiril Ananiev launched a public procurement with subject: “Selection of a contractor to carry out engineering (design, construction and author’s supervision) of the “National Children’s Hospital”. The procedure was attacked as flawed, including in court.

Through November 2019 The Supreme Administrative Court gave the green light to the Ministry of Health to award the contract for the construction of the new national children’s hospital, rejecting the appeal of the Chamber of Architects.

Through January 2020 the “Child Health” consortium with the participation of “Glavbolgarstroy” (GBS) was a definite winner in the public order of the Ministry of Health for the construction of the future National Children’s Hospital and a contract was concluded with it.


The reason is that the then management of the state-owned “Health Investment Company for Children’s Hospital” EAD, which manages the implementation of the project, refused to fulfill the instructions given by the minister under the pretext that there were non-observed procedures (read more HERE).

In Kiril Petkov’s regular office, Health Minister Asena Serbezova created a working group to review what has been done on the project for the children’s hospital so far and to outline steps on how to continue it. In addition, Serbezova changed the management of the health investment company and the new management had to propose solutions to protect the state and public interest.

In response to an inquiry by Mediapool about whether steps have been taken to cancel the contract and return the advance of BGN 9.2 million from the “Children’s Health” association, the official team of the Ministry of Health replied that “the “Children’s Health” association has already sent a one-month written notice for termination of the engineering contract and refund of the deposited deposit with ex. No. 0154/19.08.2022, in accordance with Art. 58, para. 4 of the contract”. According to the specified text in the contract, the contracting authority may terminate it with a one-month written notice at any time until the completion and handover of the objects, in which case it pays the contractor all amounts due at that time and releases the guarantee for good performance.

In addition, the Ministry of Health specified that, with the same letter, a refund of the advance in the amount of BGN 9,213,333.24 was once again requested. A detailed report on the work carried out under the engineering contract has also been requested from the “Children’s Health” association. “From the evidence received, the Health Investment Company has not established any activity carried out at the stages of the contract, which is why it considers that the amount has not been used at the present time, and if there is use, it has not been agreed upon and not accepted by the investment company,” they said. from the ministry.

The Ministry of Health added that if, by the end of the one-month notice period, the association “Children’s Health” does not take action to recover the transferred advance, the Health Investment Company should take the legally established actions to recover it.

The state company has absorbed BGN 760,000 for the abandoned project

The Health Investment Company itself has generated losses of BGN 760,000 so far, as its management receives salaries in the range of BGN 2,800-8,500 per month, without the engineering contract being fulfilled in substance.

“As of 30.06.2022, the health investment company recorded as a financial result a loss of – BGN 348 thousand. The total financial result, including losses from previous years, is in the amount of BGN -760 thousand. Equity as of June 30, 2022 is BGN 99.2 million, with the company’s registered capital of BGN 100 million. As of June 30, 2022, the company has no income, but total expenses of BGN 188,000. BGN. Expenses are: personnel costs, costs of materials and external services, interest costs and other financial costsreported the Ministry of Health.

The health investment company swallows the most funds for salaries: “As of 31.12.2021, the total expenses amount to BGN 316 thousand. The expenditure items are: personnel expenses – BGN 217 thousand, expenses for raw materials, materials and external services – BGN 22 thousand, interest expenses and other financial expenses – BGN 72 thousand and expenses for taxes from the profit – BGN 1,000.”

The Ministry of Health informed Mediapool that the list of personnel in the Health Investment Company as of 30.06.2022 is 4 people – three members of the Board of Directors and a technical secretary, assigned to an employment contract. Remuneration of the members of the board of directors for the month of June 2022. are:

  • Executive director – BGN 8,520.
  • Chairman of the Board of Directors – BGN 2,840.
  • Member of the Board of Directors – BGN 2,840.

“The company does not have its own income and supports itself from its capital, as this requires the management of the Ministry of Health to verify the effectiveness of the management of the Health Investment Company and the expediency of the decisions takensaid the Ministry of Health.


The ministry specified that the working group appointed by Serbezova for the future of the project made a series of conclusions and recommendations.

Among the more important of these is that due to the impossibility of overcoming the zoning norms, the project to build a children’s hospital cannot be resumed under the contract for engineering with GBS in the yard of Aleksandrovsk hospital.

Experts have recommended to do and assessment of the population’s needs for pediatric care in Sofia, Sofia region and for the entire countryas well as for the presence of needs for physical and rehabilitation medicine in children.

In addition, the specialists recommend to consider and discuss various options and offers of real estate in Sofia, on the territory of which the investment intention of the Ministry of Health to build a children’s hospital can be realized. During Serbezova’s time, the study of 5 potential properties for the construction of the children’s hospital was commissioned, but the official team of the Ministry of Health did not specify what the results were. The targeted properties belonged to the hospitals “St. Anna” (the former district), “Lozenets” (the former government), the National Specialized Hospital for Physical Therapy and Rehabilitation in the city of “Ovcha Kupel”, the University Specialized Hospital for Active Treatment in Orthopedics “Prof. Boycho Boychev” in Gorna Banya and the Specialized Rehabilitation Hospital in Bankya, and for the moment the Ministry of Health does not indicate whether it has a favorite.

The department reports that the complex analysis of pediatric care and the needs of physical and rehabilitation medicine has been reviewed by the working group. He shows shortage of specialist doctors in outpatient specialized medical care. On the territory of Sofia there are shortage of 140 pediatric beds from the first and second level of competence.

The article is in bulgaria

Tags: state cancels million contract GBS childrens hospital

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