불가리아 주요 경제뉴스 ( 14 – 21 DECEMBER 2007)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 14 – 21 DECEMBER 2007)

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Burgas Port-merchandise export center between South Korea and EU

·        Putin visits Bulgaria in January

·        Bulgaria-Russia ferryboat line launched soon

·        NPP Kozloduy meets annual production target

·        NPP Kozloduy returns uranium rods to Russia

·        State guarantee approved for Belene NPP project

·        Bulgaria could be forced to import electricity in 2008

·        NEK to stop electricity exports in 2008

·        Gas distributor Bulgargaz with new tariff revision proposal

·        Bulgargaz threatens to cut natgas supplies

·        Reuters: project company formed for Trans-Balkan pipeline

·        Bulgaria's Burgas to hold referendum on oil pipeline February 2008

·        Bulgaria shuts down Bobov Dol Power Plant unit

·        Bulgaria to sue Brussels for greenhouse gas emissions

·        Bulgarian parliament passes 2008 budget

·        Bulgaria introduces 10% flat income tax to attract more foreign investments

·        EIB pours �700 M in transport and environment in Bulgaria

·        IMF praises Bulgaria's fiscal policy

·        IMF: global credit crunch may complicate situation in Bulgaria

·        S&P revises outlook on Bulgarian capital Sofia to positive. Affirms 'BB+' L/T Rating

·        Experts from Brussels saw that the State Fund Agriculture is working professionally

·        EC approved Bulgarian Agricultural Regions Development Program 2007-2013

·        Vehicle sales hit all-time high  

·        Record-high revenues to the fisc

·        Tax collection in Sofia exceeds plan by 40%

• Bulgaria OKs local taxes jump

·        Bulgaria tries to break up on Belgian tourist market

·        Sofia with highest cost-of-living index in Industry Watch survey

·        Bulgarian women - the black labourers of Europe

·        Unemployment reaches 16-year low at 6.62%

·        Lower taxes to increase salaries in Bulgaria

·        The new EU members "untie" salaries

·        Bulgaria postal market seen at BGN 200 M in 2008

·        Bulgarian ICT hardware market tops $659 M

·         PM expects municipalities to report over BGN 500 M carry-over balance at year-end

·        Bulgarian 9-mo Economic Growth Slows Down to 5,7%

·        Varna Airport with New Cargo Storage

·        Bulgarian government oks sale of municipal hospitals

 

 

INVESTMENTS:

 

 

·        InvestBulgaria Agency (IBA) gave Investor of the Year 2007 awards

·        European Bank for Reconstruction and Development considers investments in Burgas

·        Wine plant to make room for Galeria Burgas shopping mall

·        Burgas fish port to double storage capacity

·        EVN to build power plant in Bulgaria

·        Italians invest �25 M in low-voltage products plant in Rakovski

·        Happy invests BGN 800,000 in Japanese restaurant

·        Second Spanish company to invest near Sofia's central station

·        Sofiyska Voda to invest BGN 400M in network by 2013

·        Producer of bottle caps Herti allots 13.4 mln levs for inward investment

·        Russian investor buys into Rousse's heating utility

·        USAID poured millions in Bulgaria and Romania

·        REIT Prime Property to invest �40 M in Bulgarian sea resort

·        Jails on leasing

·        Biz to downsize investment spending in 2008

·        MediaSys to invest BGN 1M in 2008

 

 

 

 

 

 

 

COMPANIES:

 

 

·        New player to enter heating trade

·        Megacompany to manage EU funding

·        Glaxo Smith Kline most dynamic company in Bulgaria

·        Wizz Air selects Swissport in Sofia

·        3rd Epiq production unit in Bulgaria to open February 2008

·        Made in Bulgaria Expo starts – “Choose Bulgarian!”

·        Bulgarian regulator considers 4th mobile operator

·        Diving equipment producer Mares chose Bulgaria

·        NSI steps up quality of services

·        M-Tel donates BGN 1.5 M

·        Waste recycling co's to invest BGN 100M in sorted collection

 

 

ANALYSIS:

 

 

·        Carmakers develop models tailored for CEE region

·        Bulgarian crime groups invest in buying political influence

·        Bulgaria faces troubled times

• Lack of qualified staff and bureaucracy - biggest problems for business in Bulgaria 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Burgas Port-merchandise export center between South Korea and EU

Korea may use the Port of Bourgas as a logistics centre for export of goods to EU countries, local businessmen proposed at a meeting here on Sunday with visiting Korean Ambassador Kim Myong-Jin. The meeting was initiated by GERB Member of the European Parliament Roumyana Zheleva."South Korea's trade with the EU amounts to 75,000 million euro,as much as with the US. This gives us Bulgarians an incredible opportunity to intensify our trade and economic contacts with South Korea," Zheleva noted.South Korea is currently using particular channels in Europe for export logistics. Bourgas's strategic location between Europe  and Asia can be used to implement such a project, the Bourgas businessmen believe.Ambassador Kim described the idea as "innovative and promising" and promised to present it to Korean businessmen. The diplomat explained that Koreans are interested in investments in the IT sector. The IT industry will be having an ever greater impact on the economy, the Ambassador believes.

Putin visits Bulgaria in January

Russia's President Valdimir Putin and his wife Lyudmila will visit Bulgaria January 17-18, shortly before Putin's second term of office expires. The official occasion for Putin's visit will be the celebration of 130 years of Bulgaria's liberation from the Ottoman yoke. During his visit, the heads of state are expected to sign an agreement on the establishment of the international company that will manage the construction of Bourgas-Alexandroupolis oil pipeline. This will be Putin's second visit to Bulgaria in the last four years. He was in Bulgaria in March 2003. In 2007 he was officially invited to Bulgaria on behalf of Bulgaria's President Georgi Parvanov during the visit of Bulgaria's Prime Minister Sergey Stanishev to Moscow. The last arrangements on the agenda of the Russian first couple are currently being made. According to sources close to The Standart, Vladimir Putin may visit Bulgaria's medieval capital of Veliko Tarnovo, the city of Pleven where one of the major battles was fought during the Russo-Turkish War of 1877-1878 or pay tribute to the monument to the King Liberator in Bulgaria's second largest city of Plovdiv.

Bulgaria-Russia ferryboat line launched soon

An agreement concerning the launching of a direct ferryboat line between Bulgaria and Russia will be signed during Russian President Vladimir Putin's visit to Bulgaria, The Standart was informed. Probably, the ferry will shuttle between the ports of Varna and Novorossiysk. Mr. Putin is also expected to sign an agreement on the establishment of an international company, which will implement the Burgas-Alexandroupolis pipeline project. Assen Gagauzov, Minister of Regional Development and Public Works spread the news last week.The extension of the Russian licenses of Bulgaria's defence plants will also be discussed during Putin's visit, as well as the recent development of the NPP Belene project.

 

NPP Kozloduy meets annual production target

Bulgaria's Kozloduy nuclear power plant met its annual production plan on December 14, the press office of the plant was quoted by Investor.bg as saying.Its annual target was set at 13 774 520 MWh.By the end of the year, units five and six of the nuclear power plant were expected to produce about 14 643 870 MWh. If achieved, the output would be an all-time production high for the two 1000 MW reactors, the plant's press office added.The early meeting of the annual target was made possible due to the timely repair of the units and the related rehabilitations. They also went hand in hand with the quality and good organisation of the staff, the plant's press office said.On December 14, units five and six were operating at a 100 per cent capacity in compliance with the Central Control Department of the Sofia power grid operator.

NPP Kozloduy returns uranium rods to Russia

Bulgaria's nuclear power-plant in Kozloduy began to transport back to Russia the processed radwaste from Units 1 and 2. The government allotted 87 million levs (1euro=1,95levs) from the budget surplus for the purpose. The sum is enough to cover the expenses for the transportation of 720 containers. The first dangerous cargo has been already transported to Russia under draconian security measures.The transportation of the processed radwaste is a necessary step for the decommissioning of the two reactors. The licenses of units 5 and 6 of Kozloduy NPP expire in October 2009.  After the date, the power-plant will have to prove its safety status again."I don't expect any surprises. There is no logic in allowing a nuclear power plant operate till September, and declare it dangerous in October," commented Sergei Tsochev, chair of the Nuclear Regulatory Agency.

State guarantee approved for Belene NPP project

The Bulgarian parliament approved state guarantees for the construction of the Belene nuclear power plant (NPP) to the total amount of BGN 1.174 billion, following heated debates in the plenary hall. The guarantees are envisaged in the 2008 Budget Act for a EUR 600 million loan from EURATOM and the European Investment Bank, which will be received by the National Electric Company (NEK).The price of Belene's electricity will be up to 4 eurocents per kWh, the chairman of the parliamentary budget committee, Rumen Ovcharov, said. The value of the two 1000-mW units will be EUR 4 billion. The terms of the loan from EURATOM are extremely favourable.

Bulgaria could be forced to import electricity in 2008

Bulgaria would be forced to import electricity soon as it experienced energy shortages after partially closing its only nuclear power plant at kozloduy in 2006, forbes.com quoted Bulgarian daily Trud. "Bulgaria, which only a year ago was a major electricity exporter in the Balkans, will have to start importing electricity in January 2008," Trud commented. Bulgaria's National Electricity Company (NEC) said in a report that electricity shortages in 2008 were expected to amount to 1.324 billion KwH, or 3.4 per cent of total consumption, Forbes said. Until the end of October 2007, Bulgaria had been able to export two billion KwH of electricity, Forbes said. But coal shortages and the necessity to partially shut down a thermal power plant because of environmental concerns would bring the country's export capacity in 2008 to zero, Forbes quoted the NEC report. Bulgaria signed a contract in 2006 for the construction of two 1 000 megawatt reactors at a new nuclear plant at Belene in order to compensate, Forbes said. Construction was scheduled to begin in 2008, with the first reactor expected to be operational by January 2014 and the second a year later, Forbes said.

NEK to stop electricity exports in 2008

Bulgaria's National Electric Company (NEK) has exported some 4.95 billion kWh of electricity in 2007, the chief executive officer of the power transmission company, Lyubomir Velkov, said. In 2008, however, NEK may terminate exports in order to guarantee the country's domestic energy balance, Velkov added.Some 6 billion kWh of electricity has been sold on the free market in 2007, i.e. 19% of NEK's total sales.

 

Gas distributor Bulgargaz with new tariff revision proposal

Bulgargaz, the state-controlled gas distributor, will move a proposal for an 11% hike in domestic gas prices from January 1, 2008, the company's executive director Dimitar Gogov told the Bulgarian National Radio (BNR) on Monday. If the proposal is accepted by the State Energy and Water Regulatory Commission, the price of gas will go from 348.96 levs per 1,000 cu m without taxes to 390 levs. The gas distributor is backing down from an earlier proposal for a 25.4% hike. Last week, the regulator suggested that the tariff is raised in 7.95% quarterly increments to spread out the cost fallout for industrial consumers. The proposal of the regulator is not satisfactory because the biggest payments to Russia's Gazprom are always due during the first quarter and that would lead to a sharp drop in revenues, said Bulgargaz Holding. According to Lyubomir Denchev, chief executive director of the holding, if the SEWRC proposal is enforced, Bulgargaz is looking at a loss of around 100 mln levs. The next price revision should be expected around April 2008 by a margin of 10%, Gogov told BNR. Bulgargaz previously maintained that once prices are adjusted in January, the next increase will not exceed 3-5% if oil prices remain below $100.

Bulgargaz threatens to cut natgas supplies

Natural gas supplies in Bulgaria may be limited next year if the State Energy and Water Regulation Commission (SEWRC) approves a stage-by-stage increase in the gas price by 7.95% every three months, the executive director of Bulgargaz, Dimitar Gogov, said. The price has to jump by at least 11% to BGN 390 per 1,000 cu. m for the company to be able to operate, Gogov added. Initially, Bulgargaz requested a more than 25-percent increase in the gas price in the first quarter of 2008.The gradual price rise suggested by the SEWRC will cause up to BGN 150 million losses to the national gas transmission company, Gogov went on to say. The company will have no resources to pay Gazprom in February and supplies may be halted.That is only a pretext for Bulgargaz to exert pressure for a price hike, the chairwoman of the metallurgical chamber, Politimi Paunova, said. According to SEWRC's chairman, Konstantin Shushulov, a rapid gas price rise may prompt collapse of the country's energy system.

 

 

 

 

 

Reuters: project company formed for Trans-Balkan pipeline

Russia, Bulgaria and Greece signed an agreement on Tuesday on the creation of a project company, Burgas-Alexandroupolis, for the trans-Balkan pipeline that will take oil from Bulgaria to Greece, reports news agency Reuters. The company will be registered in the Netherlands, Russian oil pipeline monopoly Transneft said in a statement quoted by the news outfit. President Vladimir Putin said Russia aimed to have the scheme completed soon. The 285 km pipeline will take 35 mln tons of Russian oil a year from Bulgaria's Black Sea port of Burgas to Greece's Alexandroupolis on the Aegean Sea, with the possibility to increase this to 50 mln tons in the future. The three countries in March sealed a long-postponed deal to build the pipeline, which is due to come on stream in 2009, and is seen as a further consolidation of Russia's influence on the European energy market. Transneft, Russian state-controlled oil producer Rosneft and Gazprom Neft , the oil arm of gas export monopoly Gazprom , will share the 51% Russian stake and provide crude for the project. Bulgaria and Greece will each have 24.5% of the pipeline, which will bypass the congested Turkish Bosphorus Straits and has an estimated cost of up to 1 bln euro. Greek shareholders of the project include the country's largest refinery, Hellenic Petroleum , oil company Thraki and the government, while the Bulgarian project company Burgas-Alexandroupolis BG will own the Bulgarian stake.

Bulgaria's Burgas to hold referendum on oil pipeline February 2008

Burgas, Bulgaria's fourth-largest city, will hold a referendum asking its residents to vote in favour or against a planned oil pipeline passing through the municipality.The city hall decided on Thursday to hold the referendum on February 17, allocating a total BGN 70 000 to that end.To be acknowledged as valid, at least 51% of eligible voters in the Burgas municipality have to take part in it, but it remains unclear how its outcome can influence the plans to build the pipeline.Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, earlier this year after more than a decade of intermittent talks.Municipalities neighbouring with Burgas are also harbouring fears that the pipeline could damage their lucrative tourism business, while environmental NGOs have branded the existing plans to build an oil terminal out at sea a disaster waiting to happen.At the beginning of July, it emerged that residents from the Evros province in northeastern Greece would also plan to block the construction of the pipeline over concerns about the potential environmental risks.The 280-kilometre pipeline, with 166 kilometres passing through Bulgaria, would have an initial annual capacity of 35 million tonnes, which could be later expanded to 50 million tonnes. Its costs are estimated at up to USD 900 M.

Bulgaria shuts down Bobov Dol Power Plant unit

Bulgaria's Bobov Dol power plant announced its second unit will be decommissioned on the last day of the year over environmental concerns and at the request of the European Union. European standards set the upper limit of dust concentration at 50 miligrams per square meter, which the plant is now exceeding three times.The electricity output of the 190-megawatt unit averages 120 M KWh per month. Its decommissioning will reduce the power plant capacity by 420 megawatts and slash 170 jobs. The plant, which lies ten kilometres from the town of Bobov dol, South-western Bulgaria, was built in the early 70s and attracted many experienced workers from across the country and abroad. It uses coals from eleven mines in Southwestern Bulgaria. The power plant is for sale after Greek state-owned utility Public Power Corporation (PPC), picked to buy the plant in the latest tender, failed to meet all the prerequisites to sign the privatisation contract.Bulgarian coal has high sulphur content and can be used only in tandem with expensive equipment that would cut sulphur oxide emissions, which PPC refused to install at Bobov Dol.Bulgaria will have to shut down the whole plant should it fail to make the needed investments to bring it up to European environmental standards. The process is scheduled to take up to seven years to complete.

Bulgaria to sue Brussels for greenhouse gas emissions

Bulgaria will move a claim to the European Court of Justice in link with this country's insistence that Brussels changed its decision about Bulgaria's greenhouse gas emissions quotas which have been drastically cut down. The Ministry of Environment and Waters has already prepared an official document expressing Bulgaria's official stand, which was discussed by the Council on European Affairs. The Council of Ministers will get acquainted and discuss the document today.The papers will be tabled to the European Court of Justice within several days because the deadline expires at the end of December.
 On October 26, the EC drastically reduced Bulgaria's waste gas emissions quotas for 2007, as well as for the period 2008-2012. Bulgaria insists this decision to be reconsidered, because of the serious mistakes made at taking it.The Standart has written about the consequences of this decision which will lead to serious crises in both Bulgaria's economy and state budget: the forecasts are about losses standing at some 770 million euro a year. If Brussels doesn't change its decision many plants will declare bankruptcy and Bulgaria will have to buy quotas. So far, this country sold greenhouse gas emissions quotas, thus adding considerable sums of money to the state budget.

Bulgarian parliament passes 2008 budget

Bulgaria's Parliament Tuesday,18 December, passed conclusively parts of the 2008 National Budget Act, setting the revenues at 18,308,508,900 leva and expenditures at 17,006,534,300 leva, of which 10,075,523,400 leva in outlays, 6,271,116,500 leva in transfers and 659,894,400 leva contribution to the EU budget. The budget surplus is set at 1,301,974,600 leva. Tax revenues are planned at 16,741,302,000 leva, and non-tax revenues at 1,550,370,900 leva. Corporation tax is expected to bring in 2,128,280,000 leva, income taxes on natural persons 2,150,000 000 leva, the tax on dividends, liquidation shares and the income of local and foreign juristic persons 133,500,000 leva, and value added tax 8,190,000,000 leva. The revenue from excise duties is expected at 3,797,700,000 leva. A contingency reserve is set at 489,000,000 leva, including 109 million leva for structural reforms, 80 million leva for preventing, managing and dealing with aftermaths of, disasters and 300 million for fiscal stability. Yordan Bakalov (United Democratic Forces floor leader) asked for budgeting higher revenue from excise duty and VAT and lower outlays for the administration. Arguing that the privatization proceeds are set at 360 million leva and only the sale of Navigation Maritime Bulgare will overshoot this target, he called for setting a larger figure for privatization revenue. Ivan Kostov (Democrats for Strong Bulgaria, DSB) said that yet again DSB propose adjustment of the undervalued outlays and yet again there is no debate on that. According to DSB, the draft budget has an undervalued figure for the GDP in 2008, for the inflation growth and for the influence of the price of crude oil. They also suggest increasing the transfers to the National Medical Insurance Fund and the National Social Insurance Institute, and the expected revenue from VAT. Kostov said that the government is "overcharging" Bulgarian taxpayers. Left floor leader Mihail Mikov argued that DSB seems to be asking for more money for unreformed sectores and "the answer of the ruling majority to that is 'reforms for money'." Parliament also voted its own budget for next year. It has 2,961,200 leva on the revenue side and 55,996,500 leva on the expenditure side, including 53,035,300 leva from transfers. The budget of the judiciary shows 52 million in revenue and 385,300,000 leva in expenditure (including 333,300,000 leva from transfers). The expenses also include 4,776,000 leva for the Supreme Judicial Council, 13,889,000 for the Supreme Cassation Court, 9,829,000 for the Supreme Administrative Court, 104,346,000 leva for the prosecuting service, 8,878,000 leva for the National Investigative Service and 600,000 leva for the Inspectorate with the Supreme Judicial Council.

Bulgaria introduces 10% flat income tax to attract more foreign investments

 

Bulgaria's parliament on Monday decided to introduce a 10% flat income tax as of 2008, one of the lowest in Europe, aiming to attract more foreign investments and enhance business activity, state-run news agency BTA reported. The flat tax rate replaces the EU newcomer's progressive personal income tax, which now varies from 20% for the lowest income bracket to 24% for the highest incomes. The chamber also cut dividend tax by two percentage points to five percent in a move expected to help increase return on investments and lure more foreign investors. Bulgaria relies on foreign capital inflows to offset its swelling current account deficit, expected to rise to 20% of gross domestic product this year from 15.8% last year. The country cut corporate tax from 15% to 10% in January, also in a move aimed at attracting foreign investors. Bulgaria is the fifth country in southeastern Europe to introduce a flat personal income tax rate, after its neighbours Serbia, Romania and Macedonia, and Montenegro. After introducing it Bulgaria will be the country with the lowest income tax rate in the region.

EIB pours �700 M in transport and environment in Bulgaria

Bulgaria's finance minister Plamen Oresharski and European Investment Bank (EIB) vice-president Matthias Kollatz-Ahnen signed on Friday a memorandum under which Bulgaria will receive EUR 700 M in funding from the bank until 2013.The money will be used to finance the Bulgarian government's contributions to projects under the EU's Transport and Environment operational programmes.Bulgaria can draw the funds in 20 tranches of at least EUR 30 M each, with the exact conditions for each loan to be decided on an ad hoc basis.Interest rates for the loans can be both fixed-rate or floating-rate, while the maturity period limit is set at 25 years, with up to seven years grace period.EIB will exercise constant control over how the money is spent, starting from having a say in whether projects will receive funding and down to ensuring all EU standards are observed, Kollatz-Ahnen said.

IMF praises Bulgaria's fiscal policy

IMF Executive Board shared several main conclusions for the economy development and the reforms' progress in Bulgaria, informed from the Finance Ministry. It was reported that the actual growth of GDP in 2007 will probably stay at relatively stable level of 6%.From the fund analyzed that in the growth's base appears some inflation pressure, due to increase of oil prices and some food products on the international markets.The fiscal policy leaded from the Government in the last years reaches bigger exceeding of incomes over expenses as reaction against the running account deficit.The directors said that thanks to the reasonable fiscal policy the state budget is very good balanced. Keeping of the same policy is needed in 2008.In the conclusions was also mentioned that supported fiscal surpluses will continue to strengthen the fiscal reserve of the cabinet and will decrease the risks of the formed inferior economy unbalances.According to IMF the monetary board in Bulgaria is stable and functions extremely good.Keeping of the country's economy stability requires from the government to continue the strict fiscal and incomes policy, aiming to withhold the internal demand pressure and the following absorption of structural reforms in support of the competitiveness and actual convergence.

 

IMF: global credit crunch may complicate situation in Bulgaria

The IMF Thursday sounded its first warning that the Bulgarian economy may yet feel a pinch from the global credit crunch.Juan José Fernández-Ansola, the IMF senior resident representative in Bulgaria, said the global credit fears have so far had moderate effects on Bulgaria but the situation could take a turn for the worse over the next couple of months.Fernández-Ansola said the global tightening of lending conditions could increase the cost of borrowing for Bulgarian banks and businesses, a trend that is already underway gathering momentum although slower than elsewhere.The IMF official also pointed out another possible fallout. In his view, if EU growth declines sharply that would grind down demand for Bulgarian goods abroad thus souring the growth outlook for the economy. He said there is currently no indication that this is happening but that it is too early to assess the situation. The IMF Thursday released its staff report on Bulgaria, saying that the private investment boom has provided surprisingly little boost to Bulgaria’s growth performance but the growth payoff may be underestimated or come with delay. A stronger push on long-delayed structural reforms, particularly reforms raising public sector efficiency, is also needed, says the report. In this way, the economy will better absorb external shocks and sustain investor confidence and, as a result, productivity-driven growth. The fund warns that investment in industrial manufacture is disappointingly small in light of the fact that Bulgaria's labor costs remain competitive. Exports remain focused on the low segment of products with small value added.

S&P revises outlook on Bulgarian capital Sofia to positive. Affirms 'BB+' L/T Rating

 

Global rating agency Standard & Poor's said on Thursday it revised its outlook on the Bulgarian capital Sofia to positive, based on improving revenue autonomy and better-than-planned budgetary performance.The 'BB+' long-term issuer credit rating of the ciity was affirmed, S&P said in a statement. "The rating is constrained by the city's weak institutional framework, low expenditure and revenue flexibility, and potential pressures associated with non-self-supporting entities," said Standard & Poor's credit analyst Felix Ejgel.These factors are partially mitigated, however, by high economic growth--which results in increasing revenues and improving budgetary performance--and a modest debt burden. The city's direct debt should remain less than 40% of operating revenues in 2007-2009. Long maturities and amortizing profiles should help maintain debt service at less than 6% of total revenues in the medium term. "We expect that improved tax autonomy, gradual absorption of EU funds, and high economic growth will allow the city to significantly improve the quality of local infrastructure without sizable debt accumulation," Ejgel said. If the city manages to consolidate its operating performance and stabilize direct debt as percentage of operating revenues according to medium-term forecasts, while accelerating capital investments, the rating could be raised. Should financial indicators narrow again, prompting the city to significantly increase its debt or postpone the infrastructure works, the outlook could be revised to stable, or the rating could come under pressure, S&P said.

 

Experts from Brussels saw that the State Fund Agriculture is working professionally

 

Experts from Brussels saw that we at the State Fund ‘Agriculture’ are working professionally, the Director of the fund Dimitar Tadarakov said in an interview for BNR.
‘The largest problem of the fund has been solved and by this we should have erased the bad image of the SAPARD program, Tadarakov said. By October 30th the SAPARD program has theoretically concluded with the signing of the last contracts, but the finalization of the projects and the payments will end by the end of 2008, he said.

 

EC approved Bulgarian Agricultural Regions Development Program 2007-2013

 

The European Commission approved the Agricultural Regions Development Program 2007-2013 of Republic of Bulgaria during the 20th regular session of the Committee for Development of Agricultural Regions. The active preparation of Bulgaria for participation in the implementation of the Second Pillar of the Common Agricultural Policy of the EU – Development of the Agricultural Regions started in 2004, the Ministry of Agriculture and Food Supply informed.

 

Vehicle sales hit all-time high  

 

Sales of new vehicles in the first 11 months of 2007 surpassed the 12-month sales last year, the to-date all-time high for the market, data of the Union of Car Importers in Bulgaria showed.Vehicle retailers sold 47 996 cars, trucks and motorcycles, whereas annual sales figure for 2006 was 45 300 units.The achievement is all the more remarkable in view of the fact that the figure does not include the sales of Hyundai, which reports its sales performance only on an annual basis.In the first 11 months of the year sales rose 26 per cent on the year from 38 255 units. The bulk of the sales is attributable to cars and light utility vehicles.Bikes reported the highest growth with a 66 per cent year on year growth to 481 units.Trucks also reported a substantial year on year growth, by 50 per cent to 2683 units.Toyota Balkans holds the dealers' scoreboard with 5277 units sold and a market share of 11.69 per cent. Second comes Moto Pfohe with 4011 units and a 8.88 market share. The top three wraps up Sofia France Auto with 3739 units and a 8.28 per cent market share.

Record-high revenues to the fisc

Maria Murgina, Executive Director of the National Revenue Agency, said that by the end of the year the agency would collect 1.5 billion levs more than it was initially planned. Thus, the state budget will be overfulfilled by fifteen percent. Last year, the National Revenue Agency overfulfilled their plan by nine percent (BGN626M). By the end of the last month, the revenues from taxes and social insurance premiums reached 10.3 million levs. In nine months the agency carried out 81,000 inspections and 17,000 audits, registering 12,000 breaches and collecting 760 million levs extra revenues to the Fisc, of them – BGN501M  from VAT audits.The NRA will start carrying out electronic audits as of the next year.Thus, tax authorities will inspect the companies' books through the Web.

 

Tax collection in Sofia exceeds plan by 40%

 

Тhe Sofia directorate of Bulgaria's National Revenue Agency (NRA) has collected BGN 3.9 billion taxes and social security contributions, according to data as at December 17, 2007. The amount exceeds the planned revenue for the whole year by 40%. The revenue from taxes on personal incomes totals BGN 579 million, corporate tax collections stand at BGN 514 million. More than BGN 940 million has been paid in mandatory social security and health installments.The tax revenue makes up 153% of the annual projection. The collection performance of health and social security contributions stands at 110%. VAT revenue exceeds the plan by BGN 700 million and amounts to BGN 1.7 billion.

 

Bulgaria OKs local taxes jump

Bulgaria's parliament passed conclusively on Friday amendments to the law on local taxes and fees, setting the range within which city halls are to fix their own local taxes.
Municipal councils will have the freedom to double taxes on buildings and triple those on cars, but cannot lower them below their current levels, the parliament decided. Under the newly adopted legislation the tax on property will total from 0.15% to 0.3% the amount of its tax appraisal. Inheritors will pay separate taxes, set at 0.7% -1.4% for brothers, sisters and their children who have inherited property appraised at more than BGN 250 000 and at 5%-10% for all the rest. The amendments introduce for the first time a tax on buildings that are crumbling or threaten people's health in a bid to force owners to take better care of their property. They define for the first time the licence fees paid by certain professions as local taxes to be set by the municipality councils within the range provided for by the law. The amendments may tout the independence of Bulgarian municipalities, but by stripping them of the right to fix the lowest levels of local taxes and the right to keep 25% of the income taxes collected in their bounds are feared to trigger dangerously high levels of taxes and fees. "This is a dangerous thing to do," former Finance Minister Milen Velchev from the centrist party of the former king commented after the amendments were passed. "We should allow municipalities in good financial health to lower the level of taxes on their territory, which will improve the business climate and standard of living," he added. Proponents of the amendments say they were meant to compensate local authorities after the introduction of the flat tax and tighten fiscal discipline.Opponents say the new legislation makes possible the redistribution of funds from more developed to poorer municipalities and may trigger the so-called tax tourism, prompting businesses to register in municipalities that offer better conditions. Taxpayers must pay the first installment of their local taxes from March 31 to June 30. In case the total amount due for the whole year is paid in this period, taxpayers will get a 5% discount.

Bulgaria tries to break up on Belgian tourist market

Representative of State Agency of Tourism (SAT) met the Belgian Association of Tourist Tour-operators' general secretary to discuss opportunities for more active proposing of Bulgarian tourist products to Belgian tourists. This happens on International Tourist Exposition VTEhro, which occurs in Brussels from13 to 14^th December, 2007.Bulgaria is presented for 3^rd time on the expo on a stall of 27 square meters.According to National Statistic Institute for the first 9 months of 2007 Belgian tourists in Bulgaria were 31,000 people which means over 8% raise compared to 2006.At the moment min tour-operators, offering travels to Bulgaria for Belgian citizens are Neckerman and TUI, which hold over 90% of the market share for Bulgaria.  

 

Sofia with highest cost-of-living index in Industry Watch survey

 

Sofia is the most expensive Bulgarian city to live in, closely followed by Varna in terms of the cost-of-living index, according to a regular report by Industry Watch, a private independent consulting group, cited by BTA. Sofia and the Black Sea cities of Varna and Bourgas offer the highest pay for midrange positions with no tangible differences in the average pay in the three cities. By comparison, wages in Plovdiv, Bulgaria's second largest city, and Stara Zagora (Southern Bulgaria) are over 10 per cent lower. Of the major towns, Sliven and Yambol trail the remuneration table. However, they also have the lowest cost of living, with the purchasing power of 1 lev being 26 per cent greater than in Sofia. Midrange positions have the following characteristics: employees can easily change companies or even industries if they wish to acquire knowledge that is new to them and useful for the employer; they are ages 25-45, have a basic knowledge of English, can easily adapt to a new environment and assume new functions.

Bulgarian women - the black labourers of Europe

How does the Bulgarian migrant worker look in the eyes of the West? It turns out that this is a poorly educated woman with two children coming from a region with high unemployment rates, this transpired from the latest offers submitted to the National Employment Agency. The agency has announced a "big offer" from Spain which is for 3333 Bulgarian workers with the following profile: 46 men and 3287 women who will pick up strawberries. The preceding offer was for 2,000 women and their occupation was grape-gatherers. If the Agency is to summarize the activities for which Bulgarians are searched for, it can make the conclusion that Bulgarian women are looked on as Europe's black workers.According to an analysis, made by the European Employment Service (EURES), the essential difference between the Westerner, who goes to a new work, motivated by a higher salary and greater mobility, the Bulgarian is a "guest worker" - a person who goes abroad for a year or two to earn some money and then returns to Bulgaria. The popular image the Bulgarians have built for themselves in the eyes of the world is this of women-seasonal workers and travelling masons.Unlike the migrants from the Czech Republic and Poland who usually belong to the highly-educated strata of society and leave their countries in a search for a better work, connected with their professional interests, the Bulgarians are ready to start whatever job they can find in order to earn some more money. The low-paid jobs are the only sphere where the Bulgarians are not local labourers' competition.Data of the employment agency show that the poorly educated Bulgarians are preferred for workers in Spain and Great Britain, while Germany has opened doors for Bulgarians with university education, especially in the sphere of machine engineering. There is a serious deficit of such workers in the country and any machine engineer with computer skills is welcomed on the German market.The Czech Republic and Cyprus turn to be this year's preferred destinations of the Bulgarian migrant workers. Apart from construction workers, Cyprus accepts Bulgarian architects, hotel-keepers, sick-nurses and locksmiths.

Unemployment reaches 16-year low at 6.62%

Тhis has been the most successful year for increasing employment and reducing unemployment in Bulgaria, minister of labour and social policy Emilia Maslarova said.
Economic activity has reached an 18-year peak this year at 67.2%, up by 1 percentage point compared with 2006. The economically active population includes people aged 15 to 64 who are active in the labour market (employed, unemployed or looking for work). The increase in employment is even bigger: 2.5 percentage points to 62.7%. Unemployment reached a 16-year low for the fifth month in a row in November, Maslarova went on to say. The average unemployment rate in the country was 6.62% last month but in Sofia it was 1.54% and in Bourgas, Gabrovo and Varna, less than 5%. For the whole year 2007 unemployment is expected to be below 7%.

 

Lower taxes to increase salaries in Bulgaria

Fifty-five per cent of employers in Bulgaria said that a decrease of tax and social security burden in 2008 would allow an increase in the salaries.Some 37 per cent of the employers interviewed, said that the decrease would also decrease the grey economy, Bulgarian Industrial Association (BIA) research showed.Twenty-six per cent planned to invest the money saved from taxes in production.According to 73 per cent of the employers, 2007 was a successful year, while only 10 per cent said that the year was bad.Less than 50 per cent of the Bulgarian business said that the country’s EU accession had a positive impact, but 15 per cent were convinced that the accession was a negative factor.In 2007, 42 per cent of companies invested in equipment modernisation, 26 per cent invested in buildings and 22 per cent in environment, quality and human resources management systems.Production energy efficiency, environment, health and labour safety and hygiene requirements feature among the main investment problems for businesses in Bulgaria. Interviewed said they would count mainly on EU funds for the resolution of these problems.Fifty-eight per cent of companies were ready to apply for EU funding, while 24 per cent were having second thoughts. From those who would apply for funding, 45 per cent said they would need consultancy to prepare the application documents, while 22 per cent expected they did not have the required amount of co-funding.

The new EU members "untie" salaries

The salaries in the new EU countries marked an increase of up to 30% in the third trimester of this year, which caused serious concerns about the region's compatibility and fears that the economies in Central and Eastern Europe could "overheat". The increase of salaries is due to the great number of highly qualified workers from the region, who have left their native countries for better paid jobs in Western Europe, and to the fact that the labour market is not flexible enough which hampers the recruit of personnel in some of the countries.The cost of labour in Bulgaria and Romania - the two countries which were the last to join EU in January, 2007 - has gone up, too. The hike in salaries in Bulgaria outgrew by more than 6% the country's economic growth rates in the last three years. In the third trimester of 2007 the monthly payment went up by 16,3%.In the meantime, the price of labour in Romania marked an increase of 23,2% on the background of constantly boosting economic growth in the last years. According to the forecasts this and next year the economic growth in Romania will reach 5%.

 

 

Bulgaria postal market seen at BGN 200 M in 2008

The Bulgarian postal services market will reach 200 mln levs in 2008, up from 166 mln levs in 2007, Plamen Vachkov, head of the local postal administration and of the State Agency for Information Technologies and Communications (DAITS), said on Tuesday. The parcel delivery market is estimated at 161 mln levs in 2007. The universal postal service, provided across the nation so that anyone can post letters and parcels to any other part of the country at the same affordable rates, accounts for only 33% of the market while the remaining share is held by non-universal services provided by delivery companies. According to DAITS, the decline in demand for universal postal services will be reversed once the market welcomes the first alternative postal carriers besides current monopoly Bulgarian Posts.

Bulgarian ICT hardware market tops $659 M

The Bulgarian market for computer and telecom hardware, including mobile phones and base stations, reached $659.8 mln in January-September 2007, up 21% year-on-year, shows data released by local market research outfit CBN. IT hardware supply value is slowing down due to falling prices. The notebooks and monitor segments show a steady growth pace. Brand PCs continued on the downturn in Q3, with the exception of brand laptops, said CBN. The company has forecast that domestic ICT hardware supplies will break the $1 bln mark in 2007. Another market research company, IDC Bulgaria, is projecting a 25.1% growth for the local ICT market in 2007. Annual hardware investment will be rising by an average of 15.4% through 2011 while software spending and related services will post growth rates of 10.8% and 17%, said IDC Bulgaria manager Neli Vacheva. According to the company, the public sector, the banks and the telecommunication companies are the biggest buyers of IT solutions and will retain their market share over the near term. Data of the State Agency for Information Technologies and Communications indicates that the local ICT market posted 15% increases in each of the past two years. The combined gross earnings of the sector's top 100 companies exceeded 860 mln levs in 2006.

PM expects municipalities to report over BGN 500 M carry-over balance at year-end

 

Bulgarian municipalities are expected to report a carry-over balance of over 500 million leva (255.645 mln euros) at the end of this year, Prime Minister Sergei Stanishev said Monday at a working meeting with newly elected mayors of the Left. The discussions focused on the utilization of funding available under the EU operational program. In the words of the Prime Minister, such a carry-over was unthinkable years ago when the municipalities invariable ended the year with a deficit. Bulgaria has successfully passed the first test in the preparation for utilizing the EU funding because all of its operational programs were approved, are opened and the procedures for collecting proposals and making advance payments are under way, said the Prime Minister. In 70-80 per cent of the projects to be funded by the operational programs, the final beneficiaries will be the Bulgarian municipalities, he added. In his words, the development of small mid-sized and large municipalities is not balanced and the cohesion policy remains a priority. The Prime Minister recalled that the 2008 draft budget has more than 50 per cent increase of the capital costs for infrastructure.

 

Bulgarian 9-mo Economic Growth Slows Down to 5,7%

 

Bulgaria's gross domestic product (GDP) grew by a real 5,7% in the first nine months of the year, compared to the same period of last year, but slowed down from the 6,4% recorded in the first half of the year, the country's statistics board NSI said on Wednesday.
GDP in the first nine months of the year was EUR 20,52 B, including EUR 8,01 B in the third quarter alone, when economic growth was 4,5%.It was the slowest Bulgaria's economy grew all year, compared to 6,2% in the first quarter and 6,6% in the second.The agriculture sector recorded a 26,4% drop over the January-September period, with floods and successive heat waves wiping out much of the harvest.Industrial growth was 10,5% and growth in the services sector - 9,7%. GDP per capita for the nine-months period was EUR 2 665,2.Last year, Bulgaria's economy grew by 6,1%, well short of the 6,5% official target. It was the third consecutive year of slow decline, from 6,6% in 2004 and 6,2% in 2005.In nominal terms, Bulgaria's GDP last year was BGN 49,1 B, or EUR 25,1 B.

Varna Airport with New Cargo Storage

 

A new cargo storage facility was constructed in compliance with the international air carriers’ organization IATA. The facility disposes of the necessary video monitoring and x-ray-equipment for processing the cargo. Thus, Varna airport will be able to offer reliable storage and quality servicing for the imported cargo. The new facility has obtained the permits for logistics activities by the Customs Agency.

 

Bulgarian government oks sale of municipal hospitals

The Bulgarian government Thu lifted a ban on the privatisation of state hospitals and clinics imposed in '01. The decision will have to approved by the MPs. The no-privatisation rule will remain in force in respect to 69 university, specialised and regional hospitals. Health care minister Radoslav Gaidarski explained that the privatisation of some 200 municipal hospitals will be in the hands of the respective local governments. The new owner of the a privatised hospital will be allowed to change its profile but will be obliged to continue to use the building for the provision of medical and social service for a period of at least 15 years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

 

InvestBulgaria Agency (IBA) gave Investor of the Year 2007 awards

IBA presented nine companies from different industries as investors of 2007 at an official ceremony held at Sheraton Hotel in Sofia. Ministers Petar Dimitrov and Plamen Oresharski, Deputy Minister Lachezar Borisov, Sofia Mayor Boyko Borisov, and IBA Deputy Director Pencho Nenov awarded the 2007 winners with the prize - a bronze statuette of Seifetin Shekerov. Volume of investment and jobs created in 2007 were the major selection criteria for this competition. "Investor of the Year 2007" winners are as follows:

• Chemical industry - Solvay Sodi, which together with its daughter company Deven invested EUR 60 million in 2007. The project of Solvay Sodi is for expansion and modernization of their soda ash production plant in the town of Devnya and that of Deven - for modernization of Deven TPP that provides electricity and heat to the enterprises in Devnya.
• Non-ferrous metallurgy - Cumerio Med with EUR 122 million investment in a new copper refinery and existing smelter capacity expansion, including EUR 10.7 million in related environmental projects.
• Electrical engineering - Schneider Electric Bulgaria for EUR 4.8 million invested in a new production plant for electric distribution products in Maritza Industrial Zone. The overall investment planned in the period 2006-2011 is EUR 22 million. The company created 90 direct jobs in 2007.
• Automotive parts manufacture - Montupet for a new aluminum automotive parts plant in Rousse Industrial Park. This is the first production unit of the French company in Eastern Europe. EUR 35 million are to be invested during the first project phase by mid 2009. The total project value is EUR 50 million. Over 1000 jobs will be created by 2011.
• IT - the German Software AG for Software AG Development Centre Bulgaria in Sofia. The centre, now with 50 developers, is planned to grow to 90 people by the end of 2008.
• Mining industry - Assarel-Medet, the leading Bulgarian mining company for open pit mining and processing of copper and other ores that provides above 50% of the national production and 0.5 % of the world's output of copper, for EUR 20.6 million invested in modernization of the open pit and the concentrator of the company. 20 direct jobs were created under this project.
• Gas supply - CityGas Bulgaria, part of Gruppo Societa Gas Rimini S.p.A., for investment in excess of EUR 15 million in a 150-km gas distribution network of Trakia Region (27 municipalities).
• Production of household appliances - Liebherr Hausgeraete Marica for investing EUR 14.5 million in the expansion of the existing refrigerators and freezers production in Maritza Industrial Zone in 2007. The project is valued at EUR 36 million. 534 direct jobs were created as of end October this year.
• Textile industry - E. Miroglio, part of Miroglio Group S.p.A. - one of the largest textile and garment manufacturers in Europe - for investing EUR 48 million in a new spinning & dyeing factory and water treatment plant in the town of Yambol. The new factory provides job to 600 people.

European Bank for Reconstruction and Development considers investments in Burgas

Burgas Major Dimitar Nikolov and Vice Major Ivelina Vasileva leaded an informal meeting with representatives of European Bank for Reconstruction and Development (EBRD). During the meting became clear the finance institution considers investing in construction of new living quarters in the city.The guests also expressed their readiness to help preparation and realization of different EU projects.Also the EBRD representatives offered their help in solving urgent problems of Burgas, such as in the city transport area, and building up a brand new municipal hospital.Burgas Major expressed optimism the new medical establishment will be ready to work in few years and will answer all modern standards demands.It will offer specialized medical care for cancer, hearth and lung deceases, which register rise in last years.At the moment medical care services on such high level are offered only in Sofia.The guests confirmed they already have realized such projects and the variant of 30-40% co-financing by the EBRD will be considered in short terms.  

 

Wine plant to make room for Galeria Burgas shopping mall

The shopping mall scheme that will be developed in Burgas by Polish company Globe Trade Center (GTC) will occupy the site of the former Vinkom plant. The plant is owned by GTC's partner in the project, Festa Holding, which has relocated its wine-making operations. GTC owns a 67% in the Galeria Burgas mall scheme with the remainder held by Festa, said Petya Slavova, chairman of the Festa board. The shopping mall, due to open by the end of November 2009, is designed by a U.S. architectural firm. The developers are yet to select the building contractor. Real estate consultants Forton have the exclusive agency contract for the mall's 35,000 sq m in net lettable area. The investor said retail space has already been prelet to two dozen fashion brands. The 10 cinema theaters of Israel's CCI will occupy an entire floor in the mall. The shopping center will have underground and above-ground parking for 1,445 cars. In Bulgaria, GTC also owns a 75% stake in a company building a shopping mall in Stara Zagora and another majority stake in a company constructing a shopping mall in Varna.

Burgas fish port to double storage capacity

Fish Port, the owner of the Burgas fish port, said it will begin the construction of a 3,000 sq m storage facility in '08. The port's current warehousing capacity is 2,500 sq m. The private fish port has more than quadrupled its cargo traffic from 80,000 tons per year in '00 to 300,000 tons in '07. Imports account for 2/3 of the cargo traffic, said Fish Port executive director Stoyan Manchev. The port has processed 160 vessels so far this year.

EVN to build power plant in Bulgaria

 

Austria's EVN will invest nearly EUR 270 million in the setting up of a 400 mW gas-run thermal power plant in Bulgaria, Stefan Szyszkowitz, chairman of the management board of EVN Bulgaria, said. The company is still studying the opportunity and is yet to decide on the location of the power plant. EVN also plans to invest EUR 30 million in the setting up of a cogeneration facility, which will produce heat and electricity. The facility will operate through a gas turbine and will save some 60,000 tonnes of carbon dioxide emissions. EVN also plans to set up a subsidiary, which will implement projects related to renewable energy sources. EVN invested a total of BGN 124 million in the maintenance and rehabilitation of the power distribution network by the end of November 2007, Szyszkowitz said. The figure is expected to reach BGN 140 million by the end of the year. EVN will invest further BGN 140 million in 2008. Some 70% of the figure will be allocated for direct maintenance of the power distribution network. EVN will also have to invest BGN 14-16 million in the purchasing of equipment that belongs to third parties. The company plans to invest a total of BGN 400 million over the next three years.
In addition to the electricity distribution companies in Plovdiv and Stara Zagora, EVN also acquired 100% in Plovdiv's heating utility (Toplofikatsia).

Italians invest �25 M in low-voltage products plant in Rakovski

The Italian arm of ABB, а global engineering company, will build a factory for low-voltage products in the Bulgarian city Rakovski, reported sgrada.com.The project will cost 25 mln euro and will create 700 new jobs. The factory should be built by the end of 2008. Rakovski was picked because it is located in the city's industrial zone where ABB will be eligible for a corporate tax exemption as an investor in a municipality with an unemployment rate above the nationwide average. The Rakovski factory will be ABB's third local investment after the acquisition of two local production assets in 1996. ABB owns a trade-production base for low voltage products in Petrich and the Avangard ABB plant for high-voltage products in Sevlievo. Some 20-30% of the Bulgarian output is shipped abroad. The company's main local customers are national power grid operator NEK, power distribution companies and power stations.

Happy invests BGN 800,000 in Japanese restaurant

 

Happy will open a new restaurant of the Chef's Group chain on Wednesday, December 19. Caca will offer Japanese cuisine and will be located on the last floor of the Hemus hotel in Sofia. It will have a total area of 500 sq. m and 100 seats. The investment in the restaurant amounts to BGN 800,000. Happy's owner, Orlin Popov, has managed to attract a renowned Japanese cook for the restaurant.The Chef's Group chain also includes fish restaurants Tambuktu and Captain Cook, as well as Karera, which offers mainly veal specialties.

 

Second Spanish company to invest near Sofia's central station

 

Spain's Urbas Guadahermosa plans to build a large-scale project near Sofia's central railway station. The information was submitted to the stock exchange in Madrid, where the developer is listed. Urbas is the second big Spanish investor in Sofia. The other company, Riofisa, has already started the design of a large complex of offices, a mall and a hotel. The 84,000 sq. m plot is also located near the central station.Urbas Guadahermosa's project will be located on an area of 120,000 sq. m, the plot was bought in early 2007 for EUR 60 million. The investment will be made in cooperation with Bulgaria's AGP Holding. Other companies may also join in but we will hold the majority interest in the project, Urbas Guadahermosa said. The company plans to build a multifunctional complex, including more than 3,500 homes, offices, a hotel and commercial space. The construction works will be financed with a EUR 40 million syndicated loan from United Bulgarian Bank and Corporate Commercial Bank.

 

 

Sofiyska Voda to invest BGN 400M in network by 2013

 

Sofia's water concessionaire, Sofiyska Voda, will invest nearly BGN 400 million in improving the water supply and sewerage network in the capital city between 2008 and 2013, Dobromir Simidchiev, head of the company's capital activities department, told the Sofia municipal council.As much as BGN 114.6 million of the amount will be provided under the ISPA programme and will be invested by 2010. Until then the concessionaire plans to spend BGN 17 million on different projects. However, the investments may increase to BGN 36 million if the State Energy and Water Regulation Commission approves a rise in the water price from BGN 0.88 to BGN 1.02 per cu. m without VAT, Sofiyska Voda's chief secretary, Ivan Ivanov, added. The company will invest another BGN 250 million between 2009 and 2013 if the water price increases to BGN 1.30.

 

Producer of bottle caps Herti allots 13.4 mln levs for inward investment

Herti, the Bulgarian producer of bottle caps, said it will invest 13.4 mln levs in the expansion of its business over the next four years. The investment program of the company has been in progress since the beginning of 2007 and will aim to boost output and further develop the Herti subsidiary companies. The bulk of the needed funding will be raised in an upcoming IPO with bank loans and own resources making up the balance. The company will offer 4.4 mln shares on the local bourse on January 25, 2008. The share sale will include 3 mln new shares as part of a capital raise while the remaining 1.2 mln shares will be sold by current shareholders. The share sale, which will employ a book-building process, will generate at least 13.6 mln levs in proceeds, allowing Herti to hike its capital to 15 mln levs. Herti currently manufactures 1.3 bln caps annually. Sales came in at 23.6 mln levs in '06. In the first half of '07, sales jumped 30% to 13.5 mln levs.

Russian investor buys into Rousse's heating utility

 

Bulgaria's Commission for Protection of Competition (CPC) allowed Mechel International Holdings to buy 49% of the capital of the heating utility in Rousse, Toplofikatsia. The buyer is part of Russia's mining group Mechel.The deal was closed only three months after Holding Slovenske Elektrarne acquired Rousse's heating utility for EUR 85.1 million. According to CPC's experts, the purchase of a minority package will have no negative market consequences. The Slovenian company announced its plans to attract a co-investor in Toplofikatsia even before the privatisation deal was finalised.

USAID poured millions in Bulgaria and Romania

As Bulgaria and Romania acceded to the EU, the American USAID finished its 17-year-long activity in the two countries. During these years USAID invested US$ 600 million into each country for the establishment of NGOs, market liberalization, etc.USAID allotted over US $ 100 million in loans to small business in Romania that generated over 100 000 jobs. Romanian representatives would often mention the agency's programmes in Bulgaria, always in a positive tone. "Bulgaria has very good family planning programmes, perhaps the best on the Balkans," said Dr Merce Gasco from the Romanian Family Planning Institute.USAID will pursue its activities via the Black Sea Trust (BST) for regional development, the main seat of which is in Bucharest. This is the latest initiative of the German Marshal Fund. With a budget of US$ 3 million a year the trust will keep on providing assistance at local level implementing non-governmental projects. The accent has shifted towards the countries from the Black Sea region that now, apart from Bulgaria and Romania, include also Ukraine, Moldova, Azerbaijan, Georgia and Turkey.

 

REIT Prime Property to invest �40 M in Bulgarian sea resort

Real estate investment trust Prime Property BG said it will begin the construction of a gated resort north of the Lozenets area, in coastal municipality Tsarevo. The Coral Residence Resort will have a 40,407 sq m footprint and a built-up area of over 40,000 sq m. Asking sale prices are expected to be in the range of 1,200-2,000 euro/sq m, ensuring a rate of return of 34%. The resort, due to open in 2010, will comprise a five-storey hotel, VIP guesthouses and apartment blocks with a top height of no more than four floors. The compound will deliver around 230 apartments and total residential area of around 35,000 sq m. The resort will have three outdoor and one indoor swimming pools, sports facilities and underground parking. The Prime Property BG portfolio consists of eight projects with a combined value of around 180 mln euro. Coral Residence is the REIT's second resort development after a 7,200 sq m scheme in St.Vlas, a sea resort north of Burgas. Immoeast AG, an Austrian real-estate developer that focuses on eastern Europe, local pension insurer Doverie, insurance company Bulstrad and U.S. pension funds are among the strategic shareholders in Prime Property BG.

Jails on leasing

 

A bill for entirely new code for the implementation of the penalties provides for private firms to build prisons. The scheme resembles the leasing – the firm will invest money in the construction and the state will repay the value in monthly payments with additional profit Dnevnik Daily reported.

 

Biz to downsize investment spending in 2008

Industrial managers have dialed back on their investment plans for '08 in comparison with this year, show the findings of a survey conducted by the national statistical office. The poll indicates the government was wrong to forecast that the availability of EU funding will encourage industrial investment. Private company managers expect investment spending to decline 3.5% over '07. The private sector accounted for 81% of 2007 investment in output expansion and new equipment.

MediaSys to invest BGN 1M in 2008

 

Stara Zagora-based mastering and replication solutions provider MediaSys Corporation will make investments for BGN 1 million in 2008, Enyo Enev, executive director of the company, told the Pari daily. MediaSys will set up a new CD and DVD production line, as well as a new packaging line. The company forecasts BGN 560,000 accounting profit for 2007. The turnover of the company is expected to total BGN 11 million for the period. MediaSys has produced 30 million discs over the last year and occupies 75% of the electronic products market in Bulgaria.

 

 

 

 

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New player to enter heating trade

 

our companies will buy heating from Sofia's heating utility Toplofikatsia and will resell it to the consumers, Stefan Dochev, director at Toplofikatsia, said. The new option is included in the regulations under which Toplofikatsia will be able to sell heating. They will be approved by the State Energy and Water Regulation Commission (SEWRC) on January 6, 2008. The contracts with the suppliers will be signed afterwards, Dochev said. He refused to disclose the names of the companies. one of the candidate suppliers of heating is a construction company, according to Dochev. Having signed a contract with Toplofikatsia, the suppliers will be able purchase the heating at discount prices. The prices in turn will be regulated by the SEWRC, Dochev said. The suppliers will also have to sign contracts with the heating accounting companies. The entry of a new player on the heating energy market resembles the model under which the National Electric Company (NEK) sells power to electricity distribution companies, which in turn resell it to their clients.

 

Megacompany to manage EU funding

 

The ruling coalition has once again put to the fore the idea for the establishment of a megacompany, which will undertake the management of the large-scale infrastructure projects, transport minister Petar Mutafchiev, said. The proposal, however, is being discussed by the government and is still unclear as to whether the company will be set up, Mutafchiev said. The former minister of economy and energy, Rumen Ovcharov, was the first to raise the question about a year ago. The company was supposed to manage projects in all economic fields, not just transport, according to Ovcharov. The company was also envisaged to manage the minority stakes in former state-owned companies that have been privatised. Ovcharov insisted that the proceedings from the disposal of this stakes should be allocated for the construction of motorways. Prime minister Sergey Stanishev confirmed the proposal in the beginning of 2006. The new company should have the rank of a ministry and should also monitor the absorption of the EU funding allocated for infrastructure, Stanishev pointed out. The setting up of a similar company is reasonable, Evgeni Chachev, an MP for the Democrats for Strong Bulgaria, told the Pari daily. The company would step up the control over the distribution of the EU funding, according to Chachev. The new structure will most likely be a state agency.

 

Glaxo Smith Kline most dynamic company in Bulgaria

 

laxo Smith Kline is the most dynamic company in Bulgaria. For a second year in a row the pharmaceutical giant topped Pari daily's ranking of the most rapidly developing companies in this country, Gepard. The award was handed to Glaxo Smith Kline's director for Bulgaria, Iliana Paunova, by minister of state administration and administrative reform Nikolay Vassilev at a ceremony on Friday evening.The sales of the company increased more than 142-fold between 2004 and 2006, the ranking shows. The company's turnover amounted to BGN 1.498 million three years ago; in 2006, the turnover reached BGN 214.241 million. The reason for the remarkable growth is the fact that the company opened a distribution centre for Eastern Europe in Bulgaria.Runner-up in the Gepard ranking is Varna-based Bulagro EOOD. The company's revenue surged 18.09-fold: from BGN 1.088 million in 2004 to BGN 19.682 million in 2006. The company will make its debut on the Bulgarian Stock Exchange next week. It is one of the biggest agricultural companies in Bulgaria.Port Infrastructure, a state-owned enterprise, is third in the ranking. The company registered a 14.82-fold sales rise: from BGN 1.725 million in 2004 to BGN 25.563 million last year.

 

Wizz Air selects Swissport in Sofia

 

No-frills company Wizz Air has selected Swissport as its ground-handling agent in Sofia.
Under the accord, Swissport Bulgaria, the first independent ground-handling company at the airport in the Bulgarian capital, will handle up to 37 flights a week, starting from March 2008.London-registered low-cost carrier Wizz Air was the first no-frills carrier to enter the Bulgarian market in September 2005 and the first to service domestic flights.
The company recently announced it would expand its Sofia base by deploying an additional new A320 aircraft starting from July 2008.Swissport International, a leading provider of aviation services, established a ground-handling company at Sofia airport at the beginning of May this year. The airport handled 2.2 million passengers last year, passenger numbers are currently rising at an annual 20%, and further double-digit growth is expected in the years ahead.

 

3rd Epiq production unit in Bulgaria to open February 2008

 

The third production unit of Epiq Electronic Assembly, the local division of Belgian electronic system manufacturer Epiq, will become operational in Feb '08, executive board member Gilles Bernard on the occasion of the company's 10th anniversary. The launch of the new 5.5 mln euro facility will boost revenues by 20% through '09 with sensor output rising from 8 mln to 10.5 mln a year. The new factory brings to 10.5 mln euro the tab of Epiq's local investments. Epiq Electronic Assembly manufactures electronic components for the auto, telecommunications and consumer electronics industries.The third production unit of Epiq Electronic Assembly, the local division of Belgian electronic system manufacturer Epiq, will become operational in Feb '08, executive board member Gilles Bernard on the occasion of the company's 10th anniversary. The launch of the new 5.5 mln euro facility will boost revenues by 20% through '09 with sensor output rising from 8 mln to 10.5 mln a year. The new factory brings to 10.5 mln euro the tab of Epiq's local investments. Epiq Electronic Assembly manufactures electronic components for the auto, telecommunications and consumer electronics industries.

Made in Bulgaria Expo starts – “Choose Bulgarian!”

More than 350 firms with 500 standstills will take part in the 13^th edition on national trade exposition ‘Made in Bulgaria". The expo open doors on Friday, December 14 in Sofia's National Palace of Culture (NDK). It will continue until December 28.Organizers of the traditional event are: NDK, Bulgarian Chamber of Commerce and Industry, Made in Bulgaria Union and Business Center Bulgaria.Main priority of the expo is support to Bulgarian producers. Main aim is to present the achievements and to introduce to public Bulgarian goods' qualities, protecting the motto: "Choose Bulgarian!'.Made in Bulgaria will be open every day between 10.00h and 20.00h.

 

 

Bulgarian regulator considers 4th mobile operator

 

The Bulgarian telecom regulator will assess the local market's possibility of receiving a fourth mobile operator, a source from the Communications Regulation Commission (CRC) told Dnevnik a.m. Depending on the conclusions reached, the CRC will provide the necessary spectrum. only last week, local mobile carriers Mobiltel and Globul and WiMAX operator Max Telecom asked for more frequencies from the vacant spectrum, and it seems that there is currently 5.4 MHz unused. However, the regulator has no right to satisfy solely the request of the GSM operators already in business, and insiders claim that there are two possible solutions in this case: based on market considerations, the three existing GSM operators may take precedence and be granted their frequency requests, while on a competitive basis, the regulator may decide that a new candidate could be in the offing, consequently starting a licensing procedure.

Diving equipment producer Mares chose Bulgaria

The famous Italian producer of diving equipment Mares is building a production plant in the Bulgarian town of Pazardjik. For that purpose the company, which is part of the Head concern, has acquired 20 000 sq.m. of land in the outskirts of the town. The plant itself is going to be built on 6 000 sq. m. and would provide jobs for some 60-100 bulgarians (according to different sources). The value of the investment is calculated at some EUR 4 million. It inspected for the plant to commence production in the 2nd half of 2008.The news was announced today after the executive vice-president of Head's diving division, Mr. Gerald Skrobanek met the mayor of Pazardjik, Mr. Todor Popov. However the information "leaked" few days ago, but was not published here by Mares' request.It is still unclear what portion of its production Mares intends to move to Bulgaria, but it is expected that the Pazardjik facility will produce a very broad line of diving and spearfishing gear. During the year the company took steps to broaden its spearfishing business and gave up on the traditional and well known brand Sporasub. All spearfishing products will be sold under the Mares brand, for which a special web-site is already operational.

NSI steps up quality of services

 

The National Statistical Institute (NSI) will issue documents certifying the main line of business of the companies applying for funding under EU's Competitiveness operational programme, NSI chairman Stoyan Tsvetkov said. Such documents may be obtained at each of NSI's 28 offices throughout the country, Tsvetkov added. The price of the documents is set at BGN 10. Companies obtaining funding under EU's operational programmes were not required to present such documents so far. NSI's new Information Corridor was officially inaugurated on Tuesday by Nikolay Vassilev, minister of state administration. NSI's library was also modernised as part of the project, which is estimated to have costed BGN 500,000. Statistical information will be accessible online through NSI's website as of February 1, 2008. The website will also be upgraded at a later stage. The use of the library and the website will be free of charge until the end of March 2008. A minimum fee will be introduced afterwards.

 

 

M-Tel donates BGN 1.5 M

In 2007, Bulgaria's first and largest GSM network operator company, M-Tel donated more than 1.5 million levs (1euro-1,95levs) for various social and cultural projects. M-Tel's good deeds were not left unnoticed and Bulgarska Traditzia Foundation awarded the company with a honorary diploma for its social responsibility and efforts in raising public awareness to the social problems in Bulgaria. More than 700,000 levs were donated by M-Tel for the implementation of various cultural projects, as well as providing financial help to public institutions, such as the National Theater and the National Opera.
 Furthermore, in 2007, M-Tel was actively involved in four projects in the social sphere, in providing help and assistance to Bulgaria's underprivileged children and youngsters - SOS Children's Villages Bulgaria, the home for disabled children "Faith, Hope and Love", in the town of Mezdra, Foundation "Eyes on Four Paws" and the nursing home in Apriltsi village.Yesterday, M-Tel company surprised 24 foster mothers from SOS Children's Villages Bulgaria, presenting them with mobile phones and special GSM tariff programs. In addition, Bulgaria's largest GSM operator donated 100,000 levs to Tsar Kaloyan village, which suffered most from this year's floods in the region.  

Waste recycling co's to invest BGN 100M in sorted collection

 

The six packaging waste recycling organisations in Bulgaria have to invest BGN 100 million in 2008 alone. An agreement with them was signed on December 12, minister of environment Djevdet Chakarov said.Each scrap collection point will have to work with one organisation only and have good storage conditions, Chakarov went on to say. Currently a big part of the scrap is spoilt and cannot be recycled. A quarter of the sorted waste has to be provided by the scrap collection points. The number of containers for sorted waste has to double next year in order to improve efficiency.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANALYSIS:

 

Carmakers develop models tailored for CEE region

Author: Bne Media Ltd.

The story goes that when Renault wanted to introduce some not-so-cutting-edge welding techniques at its Dacia car plant in Romania, it had to unearth some former welders in France, who had long since retired or been made redundant by the arrival of robots. For the French manufacturer, dusting down the old welders made simple sense. They wanted to keep investment costs down while benefiting from cheap Romanian workers, so traditional labour-intensive manufacturing techniques won favour over high-tech, but expensive, robotics. This policy meant that Renault has only invested some $600m in the plant, which it bought in 1998, compared with the $2bn experts give as a rough amount needed to upgrade a plant to Western standards. Despite the low investment levels and rudimentary manufacturing, the actual product, a bulky-looking saloon car called the Dacia Logan, has become something of a trendsetter in the world of auto-manufacturing. Boasting the virtues of affordability and reliability, it has been tailored specifically for developing markets such as Central and Eastern Europe. Whereas in the past drivers in Bucharest or Kyiv, for example, had to make do with either a crude car from a communist-era and investment-starved factory or a second-hand car of dubious origins from the West, they can now buy a brand new car without breaking the bank."The cars have got a basic specification and to some extent rely on more dated Western components and sub-assemblies to reduce tooling costs, but the interesting thing is that they are dedicated and look different to what is available in the West," says Dr. Paul Nieuwenhuis from the Centre for Automotive Industry Research at Cardiff University. "So the markets don't think they are getting a cast-off; they are getting a unique product and that is where the Logan has been particularly successful. You can tell it's a Renault, but it's clearly a different product catered to the needs of different markets." With Dacia year-on-year-sales leaping worldwide by 42% in November, and by a whopping 102.7% in Europe, speculation has already started that Renault will try to repeat its success with the famed Russian brand Lada. In early December, the French company took a 25% stake in Lada's manufacturer OAO AvtoVaz, Russia's largest car producer. Starved of technology but possessing a brand recognised from the Baltic to the Pacific, Lada, auto industry experts argue, could make an ideal platform for the synthesis of modern design and basic manufacturing pioneered by Renault.  But when it comes to producing cars for the CEE region, Renault is not alone. In November, General Motors began to produce Chevrolets at the FSO factory in Warsaw under an agreement with the plant's owners, the Ukrainian car producer UkrAvto. While the FSO plant differs in that its comparatively young age - it was built in the 1990s – means it comes equipped with a fair amount of high-technology, GM makes no secret it has pitched the Chevrolet brand at the CEE consumer. "It's a reliable and very affordable product, and this makes it appealing," says Marc Kempe, GM's spokesman for the region. In addition to GM, both Peugeot and Toyota have both spoken about producing cars tailored to developing markets. But anybody who thinks car producers are on a benign mission to bring affordable wheels to poor drivers is mistaken. The truth is that the CEE markets, in comparison to their torpid Western European counterpart, are on the rise as disposable incomes increase, and producers want a piece of the action.Figures from the European Automobile Manufacturers' Association for the first 11 months of 2007 reveal that year-on-year car sales for the EU's Central European states rose by 12.4% in comparison to just 1.1% growth in Western Europe. Impressive as these figures may be, they are nothing when compared to Russia. By 2015, the market is set to become Europe's biggest with unit sales increasing from an estimated 2.3m for this year to 3.5m in 2015, and GM's Kempe says that sales are now growing by "100% a year."

 

 

 

 

 

 

 

Bulgarian crime groups invest in buying political influence

Author: International Herald Tribune

 

Bulgaria's powerful organized crime gangs are spending heavily to buy political influence, while Russian-style oligarchs are gaining sway in the former communist country, according to a new study. Criminal groups spent up to �100 million (US$147 million) to buy votes in October's municipal elections alone, according to the study by the Center for the Study of Democracy, an independent nongovernment organization based in the capital, Sofia.The report, published Wednesday, singled out bribery cases involving public prosecutors, mayors and other municipal officials."It is possible to identify some 20 deputies in the last two parliaments who have actively promoted legislation in the interest of economic structures linked to organized crime," the report said.Bulgaria joined the European Union in January, despite concerns by other member states about rampant organized crime in the east European country. The EU has repeatedly warned the country to curb organized crime and overhaul its criminal justice system, or risk losing economic aid.Government officials acknowledged more effort was needed to fight crime, as well as better coordination between government agencies and departments.one of the conclusions of the report is that there is insufficient will on behalf of the state to tackle organized crime," Interior Minister Rumen Petkov said. "This forces us to rethink the areas where we should concentrate our efforts on."The largest chunk of organized crime profits comes from prostitution and trafficking in women, the report said, generating an estimated �1.8 billion (US$2.6 billion) a year for the gangs involved.Some 5,000 prostitutes were estimated to be working in Bulgaria, a country of 7.7 million, while up to 20,000 are believed to be working abroad, mainly in Germany, France, Italy, Spain and Greece.Other sources of profit for crime groups are drug trafficking and stolen cars, the study said, adding that most of the money has been invested in construction and property buyouts.The report also warned of the increasing power of so-called oligarchs - businessmen who became hugely wealthy by buying up state assets at often undervalued prices following the collapse of communism."There are cities in Bulgaria where the entire economy is in the hands of Bulgarian oligarchs," Ruslan Stefanov, of the Center for the Study of Democracy, said Thursday.The report said there were similarities between Bulgaria, Russia and other former Soviet bloc countries, where former communist bosses and secret police officers have turned into oligarchs with the support of current politicians."The big problem in Bulgaria is that this oligarchic model began to become legitimized," said Tihomir Bezlov, another analyst at the center."Organized crime in Bulgaria is not just a problem for Bulgarians. It is also a problem for America and the EU," U.S. Ambassador John Beyrle said during a presentation of the report. "It makes Bulgaria weak. And we need Bulgaria, as our partner and ally in NATO, and as a member of the EU, to be strong."

 

 

Bulgaria faces troubled times

Author: Anna Mudeva, Neue Aargauer Bank

 

Every day ex-communist Bulgaria proudly announces yet another foreign investment project for a new shopping mall, a golf course or a residential complex.The real estate boom has created new jobs and the government boasts an economic growth of 6 percent a year. But investing in construction alone cannot bring long-term prosperity to the poorest European Union member. Bulgaria's problems, analysts say, include underinvestment in infrastructure and manufacturing, a large grey economy, eroding education, growing consumer indebtedness, crippling inflation and a ballooning current account deficit at a time of global credit jitters. They say the Balkan country faces troubled times ahead if it does not move quickly to address the looming economic risks. "We are seeing building of shopping malls and investment in real estate but not in product-generating sectors that can boost potential for the future. That is certainly a problem," said Ivailo Vesselinov, senior economist at Dresdner Kleinwort. The European Bank for Reconstruction and Development (EBRD) said the investment pattern was worrying and Bulgaria was likely to feel a negative impact in the medium term. "There should be more efforts in dealing with issues like human capital, education, the brain drain," EBRD's economist Fabrizio Coricelli said. Out of a total of 4.36 billion euros in foreign direct investment attracted last year, nearly 3.2 billion went into real estate and construction, financial services and trade. Manufacturing received just 804 million euros. The World Bank warned recently that Bulgaria would never reach EU income levels if its labour productivity continues to rise by only 2 percent a year. The share of services -- banking, trade and real estate in particular -- now makes over half of the country's annual economic output, while industry's share stays roughly unchanged at around 30 percent and agriculture has shrunk threefold. With global borrowing conditions getting tighter, analysts expect the fast pace of property price growth in post-communist Europe -- at an average annual of 20 percent -- to slow down and investment to moderate. A decline in foreign capital flows would hurt Bulgaria, which relies entirely on foreign direct investment to cover a yawning current account gap of over 20 percent of GDP this year, driven by surging imports. "The credit crisis will not end tomorrow...over the years there will be a negative impact on Bulgaria," said Daniel Gros of the Brussels-based Centre for European Policy Studies. Another headache is racing inflation, which hit an annual 12.6 percent in November. Analysts warn that without some slowdown in explosive consumer lending and demand, Bulgaria's emerging economy faces a serious risk of overheating. Bulgarians readily run up debt in their zeal to buy flat screen TVs, new cars and houses after decades of communist austerity. Inflation adjusted lending rates are negative or close to zero, which draws queues for more loans. Credits have jumped 60 percent by October, while deposits rose 30 percent. The central bank, worried by the credit boom, urged banks earlier this month to raise lending rates and tighten rules in line with the international situation. It said it was ready to intervene with fresh measures to cool down the trend. And while a financial crisis like the 1996/97 one that wiped out a third of Bulgaria's banks is unlikely, the country could feel the pinch if western banks, which control most of the local sector, tighten funding for their arms, analysts said. The Socialist-led government has repeatedly pledged to keep its prudent fiscal policy and run a budget surplus of over 3 percent of GDP next year to counter external risks. But analysts say it remains to be seen whether the ruling coalition, whose popularity is waning, will not succumb to growing public pressure for higher wages.The government's main tool to steer the economy is fiscal policy as Bulgaria operates under a currency board regime, which limits monetary policy and fixes the lev currency to the euro.

 

Lack of qualified staff and bureaucracy - biggest problems for business in Bulgaria 

Author: Rene Beekman, sofiaecho.com

A lack of qualified staff and bureaucracy were the most serious problems of businesses in Bulgaria, research by the Bulgarian Industrial Association (BIA) showed.More than 1000 companies had taken part in the research in 2007, Dnevnik daily said.With 52 per cent each, the two problems ranked highest among complaints from businesses. Besides about the amount of bureaucracy, another 36 per cent of businesses complaint about the inefficiency of bureaucracy and 32 per cent about its corruption. All of which are different sides of the same problem, Bozjidar Danev, chairperson of the BIA saidBIA would start court procedures at the Supreme Administrative Court (SAC) against almost 30 fees for licenses, permits and regulations, which, according to data from the BIA, would be increased five to 10-fold in 2008, Danev said. The first to be addressed would be fees in healthcare services.Deputy chairperson of the IA Dikran Tebeyan said government had planned in its 2008 budget proposals increases of income from taxation of 24 per cent, or 115 million leva.Businesses were afraid that financial decentralisation would lead to attempts at municipal level at pocket-filling by increasing taxes, Dnevnik daily said.It could not be that one and the same administrative service would have different fees in different regions of the country, because that would mean that somewhere it was over-charged, Danev said.For the first time, the annual research showed a significantly negative valuation of municipal administration, 55 per cent of businesses was unhappy.Lack of implementation of laws and a lack of control were the most important causes for bribes and concealing of profits and income, businesses said. "Deputies smoke outside designated areas, national security and police services constantly break road traffic regulations," Danev said to give a few examples.Biggest development area for corruption, according to businesses, was public procurement. The fact that a large part of the absorption of EU funds would be dealt with under the same rules, did not do much to put employers at ease.