What is the Defence Ministry’s biggest secret? Not personnel numbers or weaponry specifications – in the first week of July, the biggest secret was the name of the only company to show an interest in buying the ministry’s brand-new hotel.

Officially dubbed the National Army Complex, it is usually referred to as the "military NDK", suggesting that it was a scaled-down version of the National Palace of Culture (NDK) conference centre, which is just a few blocks away.

Further proof that a secret can only be kept by one who does not know it, the potential investor was identified as Marisol, a company set up only a month before it bought the tender paperwork. Its listed address was the headquarters of legal firm Natan, Kanev, Nikolova and Partners.

A check by Kapital showed that the company behind it is Abasol, one of Spain’s largest renewable energy contractors, which was bought in 2008 by Spanish hotel chain and property developer Prestige Group. The Spanish investors thought the building could be refurbished as a five-star hotel, giving them their first location in Bulgaria.

"For several months we have been looking for a plot in central Sofia, which we could use to build a high-class business hotel. When we found out that the building is for sale, we decided that it is a golden opportunity," the Bulgarian representative of the Spanish chain, Petko Minchev, said.

The only way to ascertain whether the building itself was suitable for the purpose was to buy tender papers. Having examined the building, the conclusion was that it did not meet the chain’s needs and no bid was made.

The building does not have enough hotel rooms, nor were they designed in a way befitting a five-star hotel, according to Minchev. The only way to have a five-star hotel on the Skobelev Boulevard location would be to tear down the existing construction and start from scratch, he said.

Total mess
Another problem for the investors was the starting bidding price of 99.5 million leva. Industry sources said that at a time when investment in real estate was synonymous with bleeding cash, the price was too high. The building is yet to get the final right-to-use permit, while some areas designed for the needs of the Defence Ministry will render them useless for any other purpose. The lack of interest from other bidders confirms the industry opinion, but is also proof of how little effort was put into marketing the building.

"If it was just the plot without the building and if the price was different, we would have made an offer, but under these conditions we will continue looking," Minchev said. Even if Marisol had bid, without a second bid the tender would have had to be declared void.

Under the existing strategy, a new tender will have to be called within a month. The terms will be the same, but one bidder would be enough for the tender to proceed. If it draws no offers, the ministry will continue calling new tenders at progressively lower prices until it finds a buyer.

The reasons the ministry is selling the "military NDK" in the first place is that it decided that it did not need a large building and the high maintenance costs. The proceeds would be used to buy apartments for military personnel.

The decision to build the conference centre was made by Nikolai Svinarov, the defence minister in the Simeon Saxe-Coburg cabinet, but construction started under his successor in the Sergei Stanishev cabinet, Vesselin Bliznakov. Outgoing minister Nikolai Tsonev, who replaced Bliznakov in the cabinet reshuffle in 2008, was the one who put the building on sale.

The land plot was passed around from one ministry agency to another over the years and was briefly for sale in 2001, when the asking price for the 1.4ha plot was 14 million leva. Media speculated at the time that it was only for show, since short deadlines and limited information prevented interested parties – including two foreign governments that wanted to build embassies there – from bidding.

The rough structure put on sale now includes a four-star hotel with 35 apartment suites, a 970-seat conference hall, underground parking on two levels, a TV studio, offices, shops and a spa. The reasoning was that it would be used to host foreign military delegations, but the ministry still owns another hotel in Sofia that is used for that purpose. Initially, construction costs were estimated at three million leva, but the current rough construction, before finishing works, cost 24 million leva.