불가리아 주요 경제 뉴스( 10 – 16 MAY 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 10 – 16 MAY 2008 )

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Bulgaria, Iran discuss economic relations

·        Euro currency in Bulgaria - earlier in 2014

·        Bulgaria has become more competitive

·        Bulgaria has the highest budget surplus

·        Bulgarian government lowers 2009 GDP growth forecast

·        CED does not expect 2-digit inflation for 2008

·        Bulgarian inflation for April breaks European record

·        Economy Minister forecasts preserved 2008 inflation rate

·        Economy Minister: A good crop will reduce prices

·        Economy Minister: Bulgaria's fuel sector has too high profit margin

·        Money in circulation up 20%

·        Bulgarian export raises with 30%

·        Bulgaria's trade deficit in January-February 2008 up to BGN 2,400 M

·        24% raise in sale of new automobiles in Bulgaria

·        Bulgarians turn cash into cars due to high inflation

·        The construction of Trakia highway proves twice cheaper

·        Standstill in local tourism expected

·        SPA and wellness tourism in Bulgaria to flourish

·        Bulgaria tourist center opens in Madrid

·        Bulgaria PM opens Agro Equipment Expo in Danube city of Ruse

·        Dairies forced to use imported milk

·        Plovdiv Fair soon to extend to Sofia and Varna

·        China interested in Bulgarian wines and cosmetics

·        Bulgaria rose oil to be registered with EU

·        Over �400 M designed for human resources development until 2013

·         Bulgaria National Innovation Fund encourages new technologies

·        Foreigners to work with green, blue card in Bulgaria

·        Bulgaria gets back 50,000 yuppies

·        Wholesale market for IT products eyes $500 mln mark

INVESTMENTS:

 

·        Bulgaria ranks first on FDI in 2007

·        Direct investments in Bulgaria fall over 17% in beginning of 2008

·        Morgan Stanley may finance infrastructure investments in Bulgaria

·        Construction of "Grand Plaza" complex opens in Bugaria's Ruse

·        US to invest over USD 60 M in joint military facilities in Bulgaria

·        Serbians to make a fish processing plant in Bulgarian village

·        Waste treatment plant opens in Sofia

·        Bulgarian copper smelter Cumerio Med opens �12.8 M gas cleaning facility

·        Foreign investments in Bulgaria - dirty money laundering?

 

 

 

COMPANIES:

 

·        45 countries participate in Sofia medical equipment exhibition

·        Rakovski industrial zone tenants reach 20 companies

·        Bulgaria&Romania are the biggest contributors to Coca-Cola HBC's profit

·        Foreign companies eye fourth GSM licence

·        European experts to audit Kremikovtzi

·        Eko Bulgaria to put �76.7 M in filling stations

·        German footwear retailer Deichmann to enter Bulgarian market

 

 

 

ANALYSIS:

 

• The obscure energy future

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria, Iran discuss economic relations

 

Bulgaria and Iran discussed their economic relations at the 15th session of the mixed economic committee. The session was held in Tehran for three days until Wednesday, said the Transport Ministry. The talks focused on cooperation in the gas and oil industry, transport, tourism, IT,agriculture and trade.Transport Minister Peter Moutafchiev, who co-chaired the session, said that Bulgaria sees in Iran a major Asian partner and that Bulgaria's accession to the EU has paved the way to broader contacts between the two nations. Mohammad Rahmati, the Iranian Minister of Roads and Transportation, said that his country's foreign policy is based on mutual respect and development of its relations with other countries. In his words, Bulgaria has a special place in Iranian foreign policy. He voiced hope for stepped up development of Sofia-Tehran relations in air, land and railway transport and suggested that the committee sessions be held on an annual basis.Later on Wednesday the two sides are expected to sign agreements in air transport, an agreement on avoidance of double taxation and on increase of investment. Moutafchiev's agenda also includes meetings with Iran's Vice Presidents Parviz Davudi and Esfandiar Rahim-Mashaei.

Euro currency in Bulgaria - earlier in 2014

Bulgaria and Romania will introduce the Euro currency in 2013-2014, 'Euro Moves East' report of 'Uni Credit Group' claims. The accepting of the Euro as national currency is among the priorities of Bulgaria and Romania and the two countries ae trying to finalize the introducing process to 2013/2014, the finance institution's economists comment.Round 320 million Europeans in 15 countries use the Euro currency as official payment mean every day. The population of the Central and East European countries that prepare to accept the Euro as national currency is round 120 million people, the analysis also points out. According to the 'Uni Credit Group''s prognoses the closest to accepting the Euro currency is Slovakia. The country has 90% chance to enter the Eurozone during the next year, the economists claim.Poland, Hungary and Czech Republic will most probably accept the Eurо in the period 2012 - 2013.

Bulgaria has become more competitive

Bulgaria’s economy went two notches up to 39th place in the annual competitiveness ranking of the International Institute for Management Development (IMD), the Bulgarian partner of the Swiss business school, the Centre for the Study of Democracy (CSD), said in a statement on its website on May 14.The main obstacles to Bulgaria’s competitiveness, as outlined in the IMD World Competitiveness Yearbook 2008, are the heavy bureaucratic and regulatory obstacles to business, unfair competition (including institutional insufficiency, grey economy and corruption), infrastructure and human resources.Bulgaria, which features in the IMD ranking for the third successive year, was 41st both in 2006 and 2007. This year, it ranked ahead of fellow European Union member states Greece, Poland, Romania and Italy.The IMD assigns scores on four criteria. It evaluates the international competitiveness of the economy, government performance, business competitiveness and available infrastructure (basic infrastructure, technical and innovation infrastructure, health care and education).

Bulgaria has the highest budget surplus

The money of the budget surplus should be somehow returned to the tax payers. That claims Georgy Angelov, economists of the ‘Open Society' foundation. Since the beginning of the year to the moment the surplus has raised to 1,660 000 000 BGN (880 million EUR).The data of the Finance Ministry's last report shows this amount is triple than the same period of the last year. ‘Part of the surplus of this overfulfilment of the budget, could be returned to the tax payers, firms and citizens in the form of lower fees, increasing of the assurance payments, for example. This act will also stimulate the economics - the firms and the workers themselves to invest, to work and to qualify and to receive more money. Actually, big surplus is not necessary, even in nowadays situation of world finance crisis. Bulgaria is champion of biggest surplus, a more moderate level and returning of part of the taxpayers' money would be good policy for Bulgaria.' Georgy Angelov analyses.

Bulgarian government lowers 2009 GDP growth forecast

 

Bulgaria's government has lowered its forecast for the country's real GDP growth in 2009 to some 6.0-6.3% from 6.8%, local business daily Dnevnik reported on Monday. Bulgaria's economy grew by a real 6.2% in 2007, slightly slower than a revised 6.3% increase recorded a year earlier. The government also said inflation is seen at 6.9% next year, revising a previous forecast for an average EU-harmonised inflation of 4.4% in 2009, Dnevnik said, quoting a macroeconomic framework presented at a meeting of the ruling parties over the weekend. Bulgaria ended 2007 with inflation of 12.5%, fueled mainly by rising food prices, as drought and floods damaged crops in Bulgaria at the beginning of the year. Bulgaria's EU-harmonised annual consumer price inflation was 11.6% at end-2007. The country, which joined the European Union in January last year, aims to enter the eurozone early next decade and the country's high inflation is seen as a major obstacle to adopting the euro.

Centre for Economic Development does not expect 2-digit inflation for 2008

Bulgaria’s economy will expand by about six per cent, economic think-tank Centre for Economic Development (CED) said in its quarterly economic report released on May 12.The January-March 2008 data give grounds to believe that economic growth would be higher than in the same period a year ago, CED analysts told a news conference. While last year it was at 5.5 per cent, in the first quarter of this year it was expected to reach six per cent.The CED was also upbeat about inflation, despite its pick-up in the opening months of the year. It turned down gloomy forecasts for double-digit inflation for the full year. Despite the high inflation early this year, the CED expects deflation in the May-August period.The think-tank's analysts argued that the current account deficit will grow in absolute terms, but in percentage terms would remain on par with last year, at 22 per cent of gross domestic product.In regard to foreign direct investments, the CED believes that they would remain at 6.5 billion euro, on par with 2007.A positive factor in economic development was that the pace of export growth already surpassed that of import. The CED hailed plans of the Economy and Energy Ministry to develop an export promotion strategy, as well as create an export promotion agency. The think-tank also said they won a public bid for an analysis about the state of Bulgarian exports.The think-tank, however, sounded alarm over faltering reforms in education and health care as well as the delay in the implementation of infrastructure projects in the transportation sector.

Bulgarian inflation for April breaks European record

14,6 annual inflation announced from National Statistical Institute. The index for consumer prices for April this year compared to March 2008 is 100,9% and the inflation is 0,9%. The inflation for the period January - April 2008 compared to the same period last year is 13,6%.After the goods and the services with biggest price jump for April compared to March are: the alcohol drinks and tobacco - up with almost 3%, foodstuff and beverages - 1,3%, clothes and shoes - with increase of 1,6%.The increase in lodgings (loans, current repairs), water, electricity, gas and others is 0,3%.

Economy Minister forecasts preserved 2008 inflation rate

 

Economy and Energy Minister Peter Dimitrov forecast preservation of the inflation rate in Bulgaria over European levels. He also said there were expectations for a certain deceleration of domestic demand and growth of the economy to about 6.2 per cent.Speaking at a presentation of Bulgarian economy and investment and business conditions in Bulgaria before more than 130 representatives of German business Tuesday, Dimitrov said the average annual inflation on the harmonized index for 2008 is expected to stand at 6.9 per cent, for 2009 - at 4.4 per cent, and for 2010 - at 3.7 per cent.The Economy Minister added that foreign direct investment in 2010 is expected to reach 8,200 million euro and that this year they will exceed 7,000 million euro.

Economy Minister: A good crop will reduce prices

"There is a tendency for lower inflation and prices, because of the expected rich crop this year," Minister of Economy and Energy Petar Dimitrov said in the coastal city of Varna, where he opened the forum "The firms and the markets in Bulgaria under the conditions of EU integration". "I was shocked when I read statistical data, according to which 67 or 68% of the Bulgarians could barely make both ends meet", the minister said. To his words, drawing an analogy between the economic crisis in 1997 and today's situation in Bulgaria is too far-fetched. The expected foreign investments in Bulgaria for 2008 amount to 6.5 billion euro. only in a year's time, the inflow of funds to Bulgaria amounts to the financial aid that Bulgaria is scheduled to receive from the EU by 2013," Minister Dimitrov said. After the introduction of the ten-percent flat tax, some 20,000 Bulgarians have decided to go out of the gray sector of economy and declare their incomes for the first time. Turkey and India are ready to import specialists and workers to Bulgaria.

 

 

 

 

 

 

 

 

Bulgaria's fuel sector has too high profit margin, Economy Minister says

 

The prices of fuels in Bulgaria are not that high because the excise duties are too high but because thefuel sector has the highest profit margin, Economy Minister Peter Dimitrov said here Tuesday evening. He was speaking to German businessmen.The excise duty charged in Bulgaria for fuel is below the threashold set by the EU and this country has more catching-up to do, Dimitrov explained. At the same time the price of fuel pre-VAT and excise duty is among the highest in the EU, which is indicative of a high profit margin. In his words, Bulgarian legislators haven't had the will to set in place regulation on excessive profit. He believes that regulation is a possible solution. The Economy Ministry is ready to publish the EU rates for fuel before VAT and excise duty on a weekly basis, if this is what businesses want. Under an agreement with the European Commission, Bulgaria will continue to up the excise duty rates until it reaches the EU-wide minimum levels. 

 

Money in circulation up 20%

Almost BGN 1.3 billion in new bank notes has come into circulation between March 2007 and March 2008, an increase by 20.06%, the Bulgarian National Bank (BNB) said. This represents a rise almost 3.7% greater than the growth registered a year before.
Despite the overall increase of money in circulation, a drop by almost BGN 684 million was registered in the first three months of the period. This is due to the seasonal cycles observed in past years. Companies usually report lower turnovers after the Christmas and New Year holiday period. Also, direct taxes are due at the start of the year. In addition, households spend more on utilities in the winter season. As a combined result of these factors, each year BNB recollects a sizable portion of banknotes put into circulation at the end of the previous year. The number of counterfeit banknotes has dropped by almost 47% between January and March 2008, BNB said. A total of 1,436 such banknotes were pulled out of circulation, less by 1,357 compared to the last quarter of 2007.

Bulgarian export raises with 30%

Bulgaria has exported 30% more goods for January and February compared to the same period last year, money.bg announced. In money the raise equals 1, 147 billion BGN (573 million EUR).The biggest is increasing of the export of fats, butters and waxes of animal origin for the EU countries - more that 6 times. The mineral fuels and products, soft and alcohol drinks and tobacco's export to EU also have increased twice. Round 30 to 40 % have raised the export of machines, equipment, transport facilities, chemical substances and products. The import in Bulgaria has also raised - 1, 456 billion BGN (727 million EUR), which is 25, 1% increasing compared to last year. The goods, most imported during the period was machines and facilities (for over 2 billion BGN - 1 billion EUR) and mineral fuels (for 1,6 billion BGN - 800 million EUR). With 50% have raised the import of food and alive animals.

 

 

 

 

 

 

 

Bulgaria's trade deficit in January-February 2008 up to BGN 2,400 M

Bulgaria's trade deficit in January-February 2008 reached 2,400 million leva at FOB prices. Exports totalled 4,500 million, and imports 6,900 million leva, according to unfinalized data released by the National Statistical Institute on Monday.Exports at FOB prices grew by 30.7 per cent, and imports at VIF prices by 25.1 per cent.Exports to the EU grew by 24 per cent, and imports from the EU increased by 11.6 per cent. In value terms, exports to the EU amounted to 2,900 million leva, and imports from the EU totalled nearly 4,000 million leva. Exports to Russia reached 124.6 million leva and imports from that country added up to 876 million leva. Exports to Russia rose by 69.5 per cent and imports from it by 25.1 per cent.Bulgaria's exports to the EU of fat, oil and wax of animal and plant origin went up more than sixfold during the period under review, of mineral fuel, mineral oil and other similar products, of soft and string drinks and of tobacco increased more than two times. Imports of fat, oil and wax of animal and plant origin from the EU grew by 76 per cent, of mineral fuel, mineral oil and оther similar products by nearly 60 per cent,and of food and living animals by 54.3 per cent.

24% raise in sale of new automobiles in Bulgaria

24% raise in the sale of new automobiles for the first 4 months of 2008 accounts the report of the Bulgarian Automobile Importer's Union, compared to the same period for the last year. The sold new cars for the period are 18, 787, buses and trucks - 1, 432. The motorists have obtained 168 new machines.For the first 4 months of the last year the realized sales of new cars in Bulgaria were hardly 15, 037. It seems the high prices of petrol and diesel doesn't scare the Bulgarian consumer as he still continues to modernize the country's auto park. The most preferred brand be the Bulgarians in the beginning of 2008 were Opel an Toyota, closely followed by Ford and Volkswagen. The most bought car for the same period of the last year was Toyota.

Bulgarians turn cash into cars due to high inflation

People in Bulgaria are rushing headlong to buy new cars. Exclusive distributors for various car makes sold as many as 20,000 vehicles in the first four months of this year alone. "This is an absolute record," Union of Car Importers in Bulgaria (UCIB) members said. Against the same period last year sales have soared by 27,42 percent. Truck and buses sales have gone double. New cars are bought predominantly on leasing as the record high inflation eats up the interests. The various car leasing schemes would increase a car's price by averagely 7 percent. In the same time, cost of living in Bulgaria since April last year mounted by 14,6 percent. Another "trick" people use to evade inflation is putting their money into high interest deposits. Over 3,000 new deposits worth over 50,000 levs were opened for the first trimester of 2008 alone.

The construction of Trakia highway proves twice cheaper

The Portuguese concession of the Trakia Highway seems to be history. The road will be built by Bulgarian companies and the price will be twice cheaper than the one negotiated between the Saxe-Coburg-Gotha cabinet and the Bulgarian-Portuguese consortium Magistrala Trakia JSC. The real-term price of the construction is 2.3 or 2.5 million euro per kilometer. Thus, the highway will be fully constructed in 2.5 years for less than 300 million euro, whereas the contract for the 35-year concession of the highway between the cabinet of Simeon Saxe-Coburg-Gotha and Magistrala Trakia JSC was for 715 million euro. Today expires the deadline by which the foreign companies should present to the Bulgarian Cabinet the necessary bank guarantees and funds for the construction of the Trakia Highway. The ministers have already started preparing a letter of inquiry, in which they want to know if the Portuguese constructors have already found the necessary capital. However, the foreign companies are quite unlikely to do so, first because of the global banking crisis and second - because of the notoriety of the deal between the Saxe-Coburg-Gotha-led Cabinet and the Portuguese firms. This is why, the Government has already stared talks with big Bulgarian constructor about the construction of the 117-km-long sector of the highway between Sofia and Bourgas. Under the Trakia Highway Concession Agreement, the road was divided into three sectors, but according to Minister of Regional Development and Public Works Assen Gagauzov, it is highly probable that the unfinished part of the highway will be divided into four sectors. The Bulgarian Government is ready to provide 100 or 150 million levs (1euro=1.95levs) from the Infrastructure Fund for the launching of the procedures related to the implementation of the project. The candidates, who are able to complete the construction of the highway within the set dead line are Trace Group Hold, Moststroy and GLAVBOLGARSTROY.

Standstill in local tourism expected

The number of foreign tourists, who arrived in Bulgaria in 2007 is more than 4 million people, which is growth of 7% compared to the previous year. The incomes from tourism in 2007 are round 11% more compared to 2006, says an analysis of Bulgaria's Center for Economy Development.This way the incomes from visitations reached the sum of 2,3 billion EUR.For 2008 the money are expected to be 3 billion EUR incomes from foreign visits. The tourists are mostly from Romania, Greece, Germany, UK, Sweden and Finland.Despite the increase of the number of tourists from abroad, the tendency of standstill started to rise in local tourism.The reason comes from the overbuilding of seaside and several mountain resorts, low service quality and the shortage of qualified cadres, lack of attractively enough advertisement for Bulgaria as tourism destination.Last year Bulgarian citizens made over 4,5 million travelings abroad, which is with 8%  more, compared to 2006. The most visited countries are Turkey, Greece and Macedonia.Recently was marked the interest of Bulgarian tourists towards exotic destinations. Local holiday-makers priorities are orientated to the balneology resorts, rural and eco-tourism.

SPA and wellness tourism in Bulgaria to flourish

The interest of Bulgarian and foreign tourists towards local SPA and wellness tourism is increasing. This was reported after the latest research of local State Agency of Tourism (SAT).According to the research 18% of the Bulgarians and 134% of the foreign tourists devote time for SPA tourism during their winter vacation.One of the main priorities in the strategy for developing of the sector is exactly this kind of tourism, pointed out Stela Baltova, vice chairperson of SAT.The interest towards SPA in world measures is enormous. According to specialists this must be the tourism product around which to be united all European countries and to offer it on the world market.

 

 

 

 

Bulgaria tourist center opens in Madrid

 

The Tourism Investors Union opened the first Bulgarian Tourist Information Center in Madrid today.The Center was inaugurated by Sonya Koltuklieva, Chief Secretary of the Union as part of the Week of Europe celebrations held in the capital of Spain.The Center's main office is located at 97 "Passeo de Habana" street and has two other offices in Madrid. The center's official website is listed as www.oficinadeturismobulgaro.org.
The Center will be the only place in Spain and Portugal where interested individuals will be able to receive tourist information about Bulgaria and make vacation and trip reservations. The offers for the summer season 2008 are expected to be EUR 200 lower than the ones currently advertised by Spanish tour operators. Offers for Bulgarians wishing to visit Spain and Portugal such as EUR 170 for a week vacation in Lisbon in a four star hotel, including travel expenses are also very attractive.The Tourism Investors Union has the ambition to turn the Center into the most powerful tour operator for reservation from Spain and Portugal to Bulgaria and vice-versa. The future plans include low cost flights from Spain to the airports in Ruse and Plovdiv as soon as the safeguard clause for the private Bulgarian airlines, imposed by the EC is lifted. The lifting of the clause is expected for October, after the results from the auditors' report are revealed. The airline company Business Air, owned by the Tourism Investors Union's Chairman Vetko Arbadjiev is slated to execute flight for wealthy tourists from Spain and Portugal to Bulgaria.The Center's inauguration is part of the massive advertising campaign of the Tourism Investors Union in Spain during the Week of Europe. The goal of the campaign is to showcase Bulgaria as an attractive tourist destination.

 

Bulgaria PM opens Agro Equipment Expo in Danube city of Ruse

 

Bulgaria's Prime Minister Sergey Stanishev opened Wednesday the tenth annual specialized expo of agricultural machines and equipment in the Danube city of Ruse. The agro fair iorganized in the Ruse University "Angel Kanchev" is taking place between May 14 and May 17.Over 180 manufacturers and distributors of agricultural equipment, machines, seeds, and applicable software are taking part in the expo. "The opportunities before the Bulgarian agriculture sector through the direct EU funding are enormous and they should be used in order to achieve modernization and competitiveness on the European market", Stanishev stated at the opening. In his words, the Ruse fair was unique with the fact that it created opportunities for contacts between agro producers and manufacturers of agricultural equipment on the one side, and the relevant science and education institutions on the other. The program of the agro expo includes meetings, seminars, and presentations of scientists, students, and manufacturers in order to integrate the academic process with the actual production work. Owners of companies and farmers from all over the country are also participating in the forum. Bulgaria's PM Stanishev was impressed by the RESCUER robot destined for rescue activities in the event of natural disasters and terrorist attacks. The robot was developed by a scientific team of the Ruse University led by Dr. Daniel Bratanov at the order of a European company. The RESCUER robot weighs 250 kg and is capable of entering semi-destroyed buildings and of climbing up to the eighth floor. It is controlled from a distance of 300-500 meters. After he saw the exhibition, Stanishev met with the faculty of the Ruse University and delivered a lecture before university students.

 

 

 

Dairies forced to use imported milk

 

A year after the introduction of the transition period for Bulgarian dairy farms and enterprises, there is extreme tension in the sector, Mihail Tachev, chairman of the National Association of Milk Processors and owner of Dyado Liben dairy, said. The drama is in the lack of quality milk covering EU requirements, but the main problem is the unwillingness of the National Veterinary Service (NVS) to stick to Brussels' instructions and thus help milk producers and processors, Tachev said. As strange as it sounds, it turns out that legislation with regard to production of derivative products from the production of yellow cheese, such as pot cheese and butter, may ruin the whole sector. Bulgarian law separates dairy enterprises into three categories. Companies in the first category meet EU criteria in terms of quality of premises and quality of milk produced. The second category includes companies that own suitable buildings and process low-quality milk, and the third category comprises companies with non-complying buildings and low product quality. The first category is allowed to produce cheese, yellow cheese, pot cheese, etc. and sell to the EU. The second category may produce products with long ripening period, but may not produce pot cheese or butter. However, those are also the companies that use Bulgarian milk as raw material.Yellow cheese cannot be produced with a profit in case pot cheese is not produced, Tachev said. This actually means that all small and medium-sized farms have to cease production of yellow cheese, which is absurd. Their other option is to enter the first category, which means they will have to give up their use of Bulgarian milk (considered as a low-quality product), and seek to import milk. Otherwise, they will have to close, Tachev said. The solution would be an immediate issuance of a permission by the NVS for production of yellow cheese, which is in line with Brussels' requirements. Otherwise, it would be clear that the Bulgarian government is protecting the interests of foreign competition instead of Bulgarian dairy firms, Tachev said.

 

Plovdiv Fair soon to extend to Sofia and Varna

 

The first divisions of the International Plovdiv Fair will soon open in Sofia and Varna Other big municipal centers are expected to follow as well.The divisions will be built on state owned plots, which will be deposited in the capital of the International Plovdiv Fair in order to increase the association's assets.The announcement was made by Petar Dimitrov, Minister of the Economy and the Energy Production at the official opening ceremony of the 28th Spring Fair in Plovdiv. 991 companies from 36 countries are participating in the Fair. Bulgaria is represented by 668 companies, which is a 14% increase compared to the Spring Fair in 2007.The new Fair divisions in the other Bulgarian cities will open with the purpose to turn the Plovdiv Fair into some sort of a monitoring tool helping Bulgarian business to follow the EU trends. The Minister did not give an exact date for the new plots inclusion in the Fair's capital and did not determine their size. He pointed out, however, that the Government has given its permission and shown its will for the project's execution. "The new exhibit centers will be created with the joint participation of the private business in Bulgaria", Dimitrov explained.The private shareholder in the Fair - the joint stock company of Georgi Gergov and the Plovdiv municipality "Puldin Tour Invest" will be expected to provide new investment sources. The Minister also commented on the global mortgage crisis, pointing out that it would not slow down business development in Bulgaria and the investment process. Dimitrov assured the public that the governing Coalition would make all possible effort to keep the economic growth above 6%.

China interested in Bulgarian wines and cosmetics

Bulgarian companies - producers of wine, cosmetics and specific food will have the biggest chance to break on the immense Chinese market. That was announced by Ivan Lambov, director of a mediator firm in Beijing on the Plovdiv fair. It would be profitable to present Bulgarian tourist products and to take certain manufacture production in the Asian country. Most imported Chinese goods in Bulgaria presently are the paper, computer and photographic technique and furniture, which have null customs stake, Lambov explainedLambov warned, Bulgarian businessmen have to be aware of the specific character of the Chinese economics and people's manners there. Few days ago a big Sofia firm was cheated with big amount of money of a Chinese company - phantom, which took the money and disappeared without delivering the contracted goods.  It is massive practice in China middlemen and frauds to present themselves for direct producers in front of the foreigners. Despite all that, the import from China in Bulgaria have grown up over 10 times for the last 7 years.

Bulgaria rose oil to be registered with EU

The world-famous Bulgarian rose oil is to be registered as a geographical name with the EU institutions by the end of 2008. The news was announced by the Chair of the Bulgarian National Association for Ether Oils, Perfumery, and Cosmetics Evgeniy Ivanov on the Cosmetics Day, which was marked on Thursday as part of the Plovdiv International Economic Fair. Ivanov announced that the preparation for the registration of the rose oil had continued two years. In his words, the name of origin designates goods whose qualities resulted from special natural factors, and local manufacturing traditions.
A total of seven companies were presented Thursday with the 2007 Bulgarian Rose Awards, which is given based on a number of criteria including annual trade, total exports, new products, raw products, patents, new technical equipment, and number of employed young specialists. Three plants from the Plovdiv region were among the awarded - Alen Mak Plovdiv for its new products and intellectual property, Bulgarska Roza Karlovo - for largest trade volume and development of new markets, and Solvex - for new technical equipment.

Over �400 M designed for human resources development until 2013

Education and Science Minister Daniel Velchev has launched an awareness campaign on the grant aid available for 2008 under the Operational Programme Human Resources Development from 2007 to 2013. Over 430 million euro are designed for Bulgarian education during that period.The 2008 grant aid programmes are three : LetТs make the school attractive to the young people; Support for the development of PhD students, post-doctoral students, post-graduate students and young scientists; and Development of mechanisms for student practices. Experts of the Education and Science Ministry will tour this country explaining at workshops the possibilities opened by the programmes. The awareness campaign will cover 12 cities in Northern and Southern Bulgaria. The beneficiaries to which the programmes will be p[resented include education and training institutions, employers and NGOs. Largest are the funds available for doctoral students, an expert of the Education and Science Ministry said.Nikolai Yanev, another expert at the Ministry, said it was envisaged to provide additional "Euro-scholarships" for the best university students - for about 10 per cent of all students in higher education institutions. Prizes will be established for students engaged in priority areas designated in the national programme for reforms, technical and natural sciences. A scholarship will amount to about 90 leva (about 45 euro). Students will be eligible to receive both an Euro-scholarship and a scholarship from their university, and . Receiving one type of scholarship will not be a hindrance for a university scholarship being paid to a student, providing he or she meets the respective requirements, Yanev said.

 

Bulgaria National Innovation Fund encourages new technologies

 

Information and communication technologies, biotechnologies and renewable energy sources are just part of the priority areas slated for financing by the National Innovation Fund.This was announced by the Depute Minister of Economy and Energy Production Anna Yaneva."The deadline to apply with the Fund for project financing is July 7", Yaneva explained.Other areas to be financed by the National Innovation Fund include instrument manufacturing, nanotechnologies, environmental technologies, waste treatment and energy saving technologies.The Fund's budget for 2008 has BGN 3 million more than the one of BGN 12 million for 2007.Applicable scientific and research projects with a maximum monetary assistance amount of BGN 500 000 and project length between 12 and 36 months are eligible for financing by the fund.Some of the funds resources of BGN 15 million will also be set aside for technical, economical and pre-project research with maximum monetary assistance amount of BGN 50 000 and project length between 6 and 12 months.There are two criteria for evaluation of the projects: innovation and future economical benefits.The applications for the financing of the projects can be submitted at the Sofia office of the Executive Agency for Encouragement of Small and Medium Enterprises.

Foreigners to work with green, blue card in Bulgaria

The introduction of two types of cards, a green and a blue one, will facilitate the visa regime and access to the Bulgarian labour market of citizens of non-EU countries. That is provided for by the national migration strategy for 2008-15. The document is being agreed with the separate ministries and will be approved by the government by the end of May, minister of labour Emilia Maslarova said. The green card will allow foreign citizens of Bulgarian origin to steadily settle with their families in Bulgaria and then receive Bulgarian citizenship. The document will give them equal rights with Bulgarians'.
The blue card will facilitate the arrival of highly qualified foreigners to work temporarily in Bulgaria. Such cards will be issued to specialists that are in demand in Bulgaria. However, the blue card will only be introduced after the EU adopts a special directive, Maslarova pointed out.

Bulgaria gets back 50,000 yuppies

Bulgaria's Cabinet intends to attract back the yuppies to Bulgaria as a part of the national strategy "New state policy towards Bulgarians abroad" that was presented yesterday by Bulgaria's Prime Minister Sergey Stanishev and Foreign Minister, Ivailo Kalfin in the National Palace of Culture in Sofia.The Cabinet plans to compile a register by next year that will list all Bulgarians studying abroad. The register will feature their names and academic interests. PM Stanishev said that currently over 50,000 Bulgarians studied abroad. The list of Bulgarian brains overseas will be available for employers. The target is that the business may be able to attract back the youth with tempting job offers."We aim at getting these people back to Bulgaria and thus enhance the country's economic and social situation," Stanishev explained the motives behind the creation of the strategy. He surprised the delegates with the news that Minister Kalfin and he were working on organizing an assembly of all Bulgarians living abroad to take place next year. The Prime Minister enumerated the measures that would assist the process of attracting back the Bulgarian emigrants. "It is necessary that a council of Bulgarians abroad should be established with the Council of Ministers as well as a parliamentary committee in charge of the same issue. A specialized consultation council is also necessary," Stanishev said. one of the measures provided for bringing back home Bulgarians who now live and work abroad is to start an emigrants' fund, financed by the state. It will be used to support various initiatives of Bulgarians abroad. A special data base on Internet will give information on the vacant places to work. A reform of the insurance rights for ethnical Bulgarians will be carried out and the Government foresees a facilitating of the procedure for their acceptance in Bulgaria. Bulgarian media should pay more attention to our compatriots, PM Stanishev addressed the managers of the national media invited to the forum. Among them was Mrs Slavka Bozukova- Editor-in-Chief of "The Standart".
The Prime Minister said that he relied a lot on the media as they were the live bond of people who lived abroad with their motherland.

 

Wholesale market for IT products eyes $500 mln mark

The revenues of Bulgaria's 36 wholesale distributors of IT products totaled 234.5 mln euro in 2006, up 18.1% over 2007, shows conclusive data of local market research outfit CBN Pannoff Stoytcheff&Co. CBN anticipates that 2007 revenue growth will come in at 18% to 25% with similar figures expected for 2008 as well. The company said the segment is poised to breach the $500 mln mark in sales this year for the first time in its history. The nation's biggest IT distributors are Polycomp, Solytron, SMM-97, Asbis Bulgaria and Prima with a combined market share of 62%. CBN said it had on record 183 importers of IT products by the end of 2007, representing 1,275 IT brands.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

Bulgaria ranks first on FDI in 2007

Bulgaria ranks first on foreign direct investments in 2007, stated Bulgaria's Economy Minister Peter Dimitrov in the lecture ‘Economy perspectives before Bulgaria and Bulgarian - American trade relation'. Dimitrov explained that the incomes from foreign investments for the last year were round 6,5 billion EUR.Bulgaria's budget surplus until March 31, 2008 was 547 million EUR.The country takes 9^th place in the world on attractive place for making business, as ranking first in Central and eastern Bulgaria.The electricity prices are lower only in Latvia, but according to Minister Dimitrov's words the prices should remain at this level.The prices of natural gas are lower only in Estonia, and the petrol and diesel are cheaper only in Romania.Bulgaria can't decrease the stakes of petrol and diesel without to enter in conflict with the EU, the Economy Minister said.The country is also the last one on energy intensity, despite having huge reserves. To be realized the reserves; the measures for energy efficiency should be priority.Bulgaria ranks latest of expenses made by employers for labor. The Minister believes that this is due to the lowest levels of payment and to the lowest levels of paid taxes.

 

Direct investments in Bulgaria fall over 17% in beginning of 2008

 

According to preliminary data from Bulgarian National Bank (BNB) direct investments in Bulgaria for the January- March period are 17,5% lower then January-March of 2007.
The total investment amount for January-March 2008 is estimated at EUR 740 million while for January-March of 2007 this amount has been EUR 897.2 million.For the January-March period the attracted share capital (deposits and withdrawals of non-residents in the reserves of Bulgarian companies as well as deposits and payments from real estate deals) is EUR 463.8 million or 62.7% from all foreign investments.This numbers are also lower compared to the same period of 2007 when the attracted share capital has been EUR 566,3 million.By countries for January-March of 2008, the mot investments came from Great Britain (12,7%), Luxemburg (12%) and Germany (10%). By sectors for January-March, 2008 the real estate operations, renting activity and business services sector has registered the biggest investment amount, followed by financial brokerage and construction.

Morgan Stanley may finance infrastructure investments in Bulgaria

The infrastructure unit of international financial group Morgan Stanley is screening opportunities for investment in infrastructure projects in Bulgaria, company sources told Investor.bg on May 12.Morgan Stanley Infrastructure was interested in airports, ports, investments in the energy sector, telecommunications and social infrastructure, among others.According to Markus Hottenrott, executive director and head of Morgan Stanley Infrastructure’s European office, the bank was in preliminary talks with a score of local companies, but no deal has been signed to date. Morgan Stanley Infrastructure is generally joining forces with a local partner, strategic or financial, he said.Projects financed under various European schemes were also of interest to the bank, Hottenrott said.Also on May 12, Morgan Stanley announced it generated $4 billion in funds for a global infrastructure fund, which was $1.5 billion more than originally projected. The capital came from investors in North America, Europe, Australia, the Middle East and Asia. Among them were large pension funds and insurers, as well as affluent individual investors.The new fund will be run by offices in New York, London, Hong Kong and Beijing.Morgan Stanley Infrastructure is a subsidiary of Morgan Stanley Investment Management, a company with $577 billion asset portfolio. Morgan Stanley operates more than 600 offices in 33 countries.

Construction of "Grand Plaza" complex officially opens in Bugaria's Ruse

 

The official opening of the "Grand Plaza" complex was held on 13 May 2008 in Ruse. The complex is considered one of the biggest in its scale and significance joint public and private projects in Bulgaria.The beginning of the construction works was inaugurated by Ivaylo Kalfin, Depute Prime Minister and Foreign Minister of Bulgaria. The ceremony was also attended by the mayor of Ruse Bojidar Yotov and the project's investors Plamen Bobokov, Chairman of the Managing Board of "Prista Oil" and Marin Zgurev, Executive Director of "Densi Stroy".His Eminence, Metropolitan Neophyte performed a solemn consecration.The new complex will be located at the intersection of the boulevards "Lipnik" and "Tsar Osvoboditel"."Grand Plaza" will include a multifunctional sports facility of 26,000 square meters, shopping mall, five star hotel and office center. The building will have a parking garage with 1000 parking spaces.The direct investment amount is estimated at EUR 70 million, according to Plamen Bobokov.The sports facility only will require EUR 24 million. The facility will be used for significant international sports and cultural events. Two teams will manage the facility in a partnership with a French and a Romanian company. Meetings to discuss the future international events could be held as early as this year.The expected completion date for "Grand Plaza" is the end of 2010. "Grand Plaza" construction works will employ about 400 people. After it's opening, the complex will create 1500 new jobs for Ruse's residents.

US to invest over USD 60 M in joint military facilities in Bulgaria

 

The United States will invest a total of 66.5 million dollars in refurbishment of military facilities in Bulgaria which will be jointly used by the US and the Bulgarian army, US deputy chief of mission here Alexander Karagiannis said here on Wednesday. He was speaking at an information forum on the joint use of military facilities. He said that the two sides will sign two agreements, one for temporary and one for permanent facilities. The first contract for the joint facilities was won Wednesday by a German company in cooperation with a local company. It is for 6.5 million dollars and includes work on temporary facilities, mostly tents. The chief subcontractor is a Bulgarian company. The tender procedure for the permanent facilities is still open and the winner will be clear in September. Karagiannis explained that this procedure concerns barracks, sanitary facilities, canteens and others. The tender procedures go through the US command in Germany. Karayanis said that US servicemen will start arriving here for various drills from the end of this summer. The first batch will be of 900 US service persons who will hold joint excercises with some 100 Bulgarian soldiers for 4 to 6 weeks. Avgustina Tsvetkova of the foundation which has organized the information forum, said the two sides have agreed that the number of US soldiers in Bulgaria may not exceed 2,500 at any given moment, or 5,000 at times of rotation. They will stay for six months at the most. The facilities will be used for training. The facilities in question include the Novo Selo practice range, the air bases of Bezmer and Graf Ignatiev, and a warehouse facility in Aitos. In Tsvetkova's words, the presence of US troops does not bring a heightened risk of terror attacks because terrorists tend to avoid military facilities. The purpose of the forum is to improve awareness for the project for joint use of the Bulgarian military facilities, said Tsvetkova.

Serbians to make a fish processing plant in Bulgarian village

A fish processing plant will be built in the Bulgarian village of Hairedin, Vratsa region, informed selo.bg.The village is a municipal center and has one of the highest unemployment rates in Bulgaria.The enterprise will be established by a Serbian company which has already had talks with the municipality and has prepared the necessary documents. The designing starts next week and the first dig, according to the mayor Radoslav Stoikov, could be as early as this autumn. The municipal council with a spacial decision has alloted an area of 35 decares for the construction of the plant. Around 12 million euro will be invested in the future enterprise and 40 people will work in it after it's been constructed.

Waste treatment plant opens in Sofia

A plant for waste treatment was opened in the Sofia district of “Filipovtzi”. ECOBULPACK, an organisation which uses the packages wastes has invested more than 5 million euro in the plant's establishment. The enterprise has been built in 10 months. Over 200 new workplaces will be opened for the service of the plant's production process.
There are two installations on this territory – for glass assortment and recycling and an installation for paper and plastics assortment and baling. The mayor of Sofia Boiko Borissov and members of the Bulgarian parliament were among the officials present at the opening.

Bulgarian copper smelter Cumerio Med opens �12.8 M gas cleaning facility

 

Bulgarian copper smelter Cumerio Med on Thursday officially opened a 25 million lev ($19.8 million/12.8 million euro) gas cleaning facility to meet European Union environmental protection requirements. The facility was completed in November last year and has been operating at full capacity since early 2008, executive director Nicolas Treand told a news conference. Cumerio Med, 80 kilometres east of Bulgaria's, capital Sofia, transforms concentrates with 25%-35% copper content into anodes of 99% copper. The company, the former state-owned MDK Georgi Damyanov, invested 270 million euro in capacity upgrades and 80 million euro in environmental protection projects between 1997 and 2007. Cumerio Med is now part of Belgian group Cumerio, which has been taken over by German copper producer Norddeutsche Affinerie (NA). NA/Cumerio has an annual turnover of 10 billion euro.

 

 

 

 

 

 

 

 

 

Foreign investments in Bulgaria - dirty money laundering?

Author: AFP

 

As EU newcomer Bulgaria aims to attract ever larger flows of foreign investment, authorities and analysts have raised fears that part of the money streaming into the country may have been laundered. "A growing number of investigations come to a dead end as we find that money that we had good reason to consider dirty, or resulting from criminal activity, has been transferred through foreign banks and returned to Bulgaria as 'fresh' investment," said national investigation service chief Boyko Naydenov."You just have to look at the posh cars on the streets of Sofia, which exceed the number of luxury vehicles in any other European capital ... or the construction boom in our Black Sea resorts," he told a conference Thursday in Sofia.Bulgaria attracted some 6.14 billion euros (9.48 billion dollars) in foreign investment in 2007, official data shows."A large part of this money came to Bulgaria via companies registered in offshore zones. Proving the origin of these funds is beyond the capabilities of any Bulgarian institution right now," said Emil Ivanov of the directorate for fighting organised crime.A spokeswoman for the government's investment agency explained to AFP that the agency "trusts bank recommendations and the declaration of origin that every investor is obliged to present."Naydenov also told AFP Friday that "offshore zones are an international problem that has to be addressed."Another problem was the widespread practice of paying cash, even for expensive purchases like cars and property, Naydenov noted.The chief investigator also complained about a lack of trust abroad in the Bulgarian judiciary, which contributed to slowing down the judicial process."The reply to a request made at the same time by the German and Bulgarian investigation services to a third country arrived in Germany four months earlier than here," he noted.Bulgaria's interior ministry was seriously shaken in April by a corruption scandal that revealed how high-ranking ministry officials had scuppered police investigations by leaking sensitive information to key crime suspects.Interior Minister Rumen Petkov himself came under fire and resigned after admitting to having contacts with shadowy businessmen while the scandal sparked calls for "urgent action" by the European Union and angry commentary in the international press."Bulgaria's reputation has suffered from the scandal," US Ambassador to Bulgaria John Beyrle recently told the daily Trud in an interview.The US secret service and the FBI might be reluctant to share information with their Bulgarian counterparts on "for fear that it might be leaked to the criminals under investigation," he said.Bulgarian courts have handed down 14 sentences for money laundering over the past two years. Most of the cases concerned relatively small amounts of money resulting from the trafficking of prostitutes.The Bulgarian Financial Investigation Agency meanwhile blocked 432 suspicious financial operations worth a total 260 million euros in 2007.But a recent study by the non-governmental Risk Monitor foundation claimed that "the big fish" remained untouched.Widespread corruption is hindering the authorities' efforts to prosecute money-launderers, Naydenov said."Current or former police officers are part of every organised crime group," he said.Tens of thousands of police officers have been dismissed since the fall of communism in 1989 as a result of interior ministry reforms.But well-qualified officers are discouraged by low salaries, resulting in money-launderers being "better prepared than the police," said Ivanov.Bulgaria joined the European Union last year as its poorest member but is still being closely monitored by Brussels for failing to meet its pledges in the fight against corruption and organised crime.

 

 

 

COMPANIES:

 

45 countries participate in Sofia medical equipment exhibition

 

This year's edition of the exhibition for medical equipment, Bulmedica-Buldental, has brought together more than 1,000 participants of 45 countries. The exhibition was opened Tuesday by Health Minister Evgeni Zhelev. Among the participants are 52 foreign and 29 local producers. The biggest group come from Germany, followed by Italy and the United States. Producers from the Balkans share one stand. In his remarks, the Health Minister noted that more health professionals now can afford to buy new equiment, unlike the early years of the exhibition. Union of Dentists Chairman Nikolai Sharkov noted the huge space at the exhibition taken up by producers of dental equipment. In his words, it shows that Bulgarian denists are now ready to invest in equipment. Bulmedica-Buldental is traditionally organized under the patronage of the Health Ministry with the support of the unions of Bulgarian physicians and denosts. The organizers of Bulgarreklama report a 20-25 per cent increase of the participants this year. The event is described as the largest exhibition of medical equipment in Southeast Europe.

 

Rakovski industrial zone tenants reach 20 companies

Some 20 companies have based production and logistics operations in the Rakovski industrial zone, near Plovdiv. The zone provides employment to 500 people from the area. Manufacturers have occupied 60 ha in the zone and will be allocated a further 30 ha. one of the first tenants was William Hughes, a UK maker of coiled springs. German discount retailer Kaufland has picked the zone to host its national logistics center. The company recently opened a storage facility in Rakovski and plans two further facility additions.

Bulgaria&Romania are the biggest contributors to Coca-Cola HBC's profit

Coca-Cola HBC saw a 10% increase in its volume of sales on emerging markets in the first quarter of the year, after it sold 202.2 million unit cases, up from 184 million a year ago, with Romania, Bulgaria, Russia, Serbia and Ukraine making the biggest contribution to this increase. Net revenues from sales witnessed in this area climbed by 14%, and reached 538.8 million euros, compared with 471.2 million euros in the same period of 2007. The company posted an operating income (EBIT) worth 19.8 million euros, up 10% from 18 million euros. The emerging markets contributed 20 million euros to the group's EBIT, which was worth 67 million euros, a 10% increase compared with the similar period of last year. Despite the revenue increase, the profitability was hurt by the high cost of raw materials. Romania and Bulgaria contributed the most to improving the profitability, due to the high increases in terms of volumes sold, to price increases and the product mix available.

Foreign companies eye fourth GSM licence

 

At least two foreign companies will participate in the race for getting a licence for Bulgaria's fourth mobile operator, the Pari daily learned. Those will be Turkish Turkcell and a British company, sources said. The deadline for submitting letters of intent to the Communications Regulation Commission (CRC) is May 16. Depending on the degree of interest in the licence, the CRC will determine whether to announce a tender or distribute frequencies among all approved candidates. As expected, all Bulgarian mobile operators will request a licence for a fourth GSM operator. WiMAX operator Max Telecom, owned by businessman Krassimir Stoychev, is also keen to join in the race. The launch of number portability did not affect the telecommunications market substantially, GSM operator Mobiltel said. Less than 1% of subscribers expressed a wish to change their operator.

 

European experts to audit Kremikovtzi

 

Experts from the European Commission will audit Kremikovtzi in June in order to check whether the factory has complied with the European environmental requirements, the President of the National Federation Metallurgy at the Confederation of Labour Podkrepa (trade union) – Lyudmil Pavlov announced. According to him, a contract must be signed with the potential buyer of Kremikovtzi – Vorskla Steel Bulgaria, connected with the Ukrainian businessman Konstantin Zhevago, because the deal is almost finalized. According to the workers of the factory Zhevago is the best possible buyer, because he plans to invest USD 120 million. Apart from that the Ukrainians want to settle Kremikovtzi’s debts to the Bulgarian State Railway, National Electricity Company, and Bulgargaz.

Eko Bulgaria to put �76.7 M in filling stations

 

Standart Liquid fuel retailer Eko Bulgaria will pump 150 mln Bulgarian levs ($118.5 mln/76.7 mln euro) into filling stations in the next couple of years, the company said on May 13, 2008. A day earlier, the anti-trust watchdog gave the go-ahead to Eko Bulgaria to buy seven petrol stations and a fuel storage depot of rival Tempo Petrol. Six of the fuel outlets are in Sofia and one is in Sevlievo, in northern Bulgaria. Eko Bulgaria has a market share of 4.0 pct and a total of 57 filling stations in the country. The chain plans to double the number of its fuel outlets in the next few years. Eko is part of Greek oil refining company Hellenic Petroleum, which runs over 1,500 filling stations in Greece and over 250 outlets in neighbouring countries including Bulgaria and Serbia.

 

German footwear retailer Deichmann to enter Bulgarian market

German footwear retailer Deichmann is preparing to set foot on the Bulgarian market, as indicated by personnel recruitment ads placed in the local press. The imminent arrival of the German retailer was confirmed by the consulting agency in charge of the local hirings. No further details were immediately available regarding the local expansion plans of the company. A sundry of other international retailers are also poised to enter the Bulgarian market. The more high-profile names include clothiers C&A, Gap and Banana Republic, quickservice restaurants Burger King, cosmetics retailer Douglas, Starbucks and French travel and high-street retailer Ladardere.

 

 

 

 

 

ANALYSIS:

 

The obscure energy future

Publication: Banker Daily

 

All who had the decisive say on the development of Bulgarian power engineering in recent months liked to talk about the key projects for our country and outline a bright future for the sector's development. However, the conditional mood was the common thing for these statements. And the construction that began years ago, aimed to lead Bulgaria to the position of "an energy centre in the Balkans", is still considerably lagging behind schedule. Just some ten days ago it became clear that the building of the new power station on the site of the Maritsa-Iztok 1 thermoelectric power plant (TPP) by the US company АЕS is already late by seven months. The confession came from the investor's country manager for Bulgaria, Peter Lithgow at the opening of the concrete structure of the future station's first reactor. The feasibility study, the time for cleaning the terrain because of the asbestos discovered there, and the actions of some of the Bulgarian subcontractors, were pointed to as reasons for the delay. At the same time it was promised that efforts would be taken to at least partly make up for the delay. on paper the first 335-megawatt unit of the new TPP is to be commissioned in June 2009, and the second one - five months later. But considering the difficulties in building the turbines, the far more realistic term moves towards the year 2010. The situation regarding the Tsankov Kamak hydroelectric power plant (HPP) is even worse. Its construction started with a solemn and pompous ceremony in April 2004. The then premier Simeon Saxe-Coburg-Gotha personally detonated the first three explosives and the clearing of the construction site began. We'll take the liberty to quote part of the official information presented then. "The Tsankov Kamak water-power system is included in the national strategy for the development of power engineering till 2010 and its commissioning is planned for the beginning of 2007. A dam of 111 million cu m is projected to be built, with a 125-m-high wall, 540-m-long underground derivation and the Tsankov Kamak HPP with 80 megawatt of installed energy capacity and annual production of 185 million kilowatthours." But now, almost four years after the beginning, the terms for construction are being extended by more than 18 months, till the end of 2009, and its worth of EUR219MNB will be probably updated in accordance with the inflation rate for the passed period. In the words of Nikolay Valkanov, Executive Director of the Alpine Bulgaria company which is the subcontractor to the Austrian consortium Alpine Bau - Wateh Hydro, the delay is due to the big floods and changes of the project resulting from geological research. In addition, international experts established that the dam wall's safety should be improved and that led to a six-month delay. However, it's another question if the problems could have been avoided. But it's a fact that the lagging behind the initial schedule has a negative effect on our country's energy balance and is not the best advertisement for the Kyoto Protocol. The water-power system is a pilot initiative between Bulgaria and Austria in accordance with that document and the mechanism allows the investor (the National Electricity Company in this case) to attract cheaper financing without the need of a State guarantee. And the benefit for the Austrian Government is that it honours the commitments it has undertaken for reducing emissions of greenhouse gases. The realization of the Belene N-plant also drifts away. It's true that a few days before the Easter holidays the French BNP Paribas won the tender for choosing a structuring bank for financing the project, estimated at some EUR4BN, but the schedule for commissioning the first reactor is at least five years late from the initially planned 2009-2010. The Minister of Economy and Energy Peter Dimitrov promises that construction proper would begin by the year-end, but it's questionable if the terms fixed by him would be observed. The contractor Atomstroyexport has not presented the project for the capacity at the Nuclear Regulatory Agency and experts there will need at least nine months to consider the entire documentation and issue a building permission. We can also put the rehabilitation of Maritsa-Iztok 2 and 3 TPPs in the "list" of delays. Because of the eight-month delay in Maritsa-Iztok 2, the Council of Ministers inspectorate is already inspecting the repair of the first four units, the construction of their sulphur-purifying installations, as well as the financial condition of the company. The project costs EUR226.2MN and is implemented by the Japanese Mitsui company through a loan from the Japanese Bank for International Co-operation. The 2010 deadline by which the sulphur-purifying facilities of turbines 5 and 6 of the power plant should be built and put in exploitation will hardly be met, either. The procedure used to be financed through the ISPA programme, but because of the high prices offered by the contractors it was terminated and a new one is currently in course. Maritsa-Iztok 3 TPP which is owned by Italy's Enel missed the initially fixed deadlines, too. Modernisation started in the early spring of 2003 and was planned to last about three years. Well, it did not happen this way and one of the main contractors, Germany's DSD, was labelled the guilty one. In early 2006 the German company was replaced and the change seemed to bring results. Today all the three rehabilitated units - 1, 2 and 3, are in exploitation and operate with active sulphur-purifying facilities. once they were repaired, the installed gross capacity of each of them was increased from 210 to 227 megawatts. This increased Maritsa-Iztok 3 TPP's total capacity to 681 megawatts. The amount of sulphur dioxide emitted in the air is now more than 94% purified. Generator 4 is the only one that is not operating yet - its renovation has already begun and is progressing according to schedule. Both thermoelectric power plants are still to have difficult times. "The European Commission is going to initiate large-scale inspections in Maritsa-Iztok 2 and Maritsa-Iztok 3 and will announce whether or not they meet the requirements of the European directives for complex permissions and large fuel installations. Should inconformity with the European ecological standards emerge, the case may even go to the European Court in Luxembourg", the European Parliament Member, David Hammerstein, announced in Stara Zagora on May 2. A signal from Brussels is also expected for the selection of an investor in the construction of the new 600-megawatt power plant in the Maritsa-Iztok complex. As the Minister of Economy and Energy, Peter Dimitrov, explained, the announcement of the procedure was delayed because the European Commission had not yet approved the technology for collection and preservation of carbon dioxide emitted in the coal burning process. There are certainly more delayed projects in the Bulgarian energy sector, but it is not that important to enumerate all of them. What is more significant is that if things keep going this way, the European Union fines will be the smallest punishment for the country. The worse perspective is import of electricity and the worst one - power-supply restrictions.