불가리아 주요 경제뉴스 (13 – 20 JUNE 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 13 – 20 JUNE 2008 )

 

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

 

·        Bulgarian economy beats forecasts with 7% Q1 growth

·        WB: Bulgaria's economic growth stable

·        Bulgaria needs a predictable business environment

·        High inflation frustrates economy

·        Bulgaria ranks 64th globally in terms of trade related tariff barriers

·        Bulgaria ranks 4th in construction growth in EU

·         Bulgaria ranks last in EU by innovation investments

·        Bulgaria's pipeline politics: development of both South Stream and Nabucco projects

·        Used cars form 84.1% of Bulgaria's import

·        Bulgaria pavilion at EXPO 2008 visited by over 5000 people in one day

·        EU-US partnership and Bulgaria business climate conference held in Sofia

·        OLAF to scrutinize Bulgaria over EU funds

·        Bulgaria to lose �300 M annually from reduced greenhouse gas emission quotas in 2013-2020

·        Director of meat processing companies: VAT on foods should be reduced

·        Chairman of Bread Manufacturers Federation: Gray economy within bread production companies is due to high VAT on foods

·        Turkish demand for Bulgarian wheat

·        Some draft projects, others make protests

·        Beer market underperforms in 2008

·        Corporate culture still weak in Bulgaria

·        Business angels come to Bulgaria

·         There are no reasons for declaring emergency situation on freight transport market

·        Bulgaria's tourism revenue may treble to � 9 B per year by 2011

 

INVESTMENTS:

 

·        Foreign Direct Investments in Bulgaria down to � 1.23 B in Jan-April 2008

·        US investments in Bulgaria reach well over USD 1 B

·        Investments in real estates increase in 2008

·        Bulgarians invest � 400 M abroad

·        Austria's Cuubuus to invest �100 M in real estate projects in Ruse

·         Italy's Enel to invest in Stara Zagora rose production ops

·        Bulgarian Tesy unveils � 2 M logistic terminal

·        City of Svilengrad to join solar power project

·        NEC of Japan looks for investment opportunities in Bulgaria

·        US investors want Bulgarian nuclear plant

 

 

COMPANIES:

 

·        Oil companies may rethink investment plans

·        Bulgarian Air companies to fly directly to US

·        Bulgargaz wants increased price of natural gas

·        Auto distributor Balkan Star sees 20% rise in Varna area sales

·        Holding Roads ready to finance Trakia motorway

·        Navigation Maritime Bulgare privatization contract initialled

·        Kremikovtzi steel mill employees seek state support to set up European company

·        Sofia municipal companies receive financial marks for 2007

·       Irish Aer Lingus to start flights to Sofia

·        Austrian waste management firm M-U-T enters Bulgaria

·        French Dalkia to launch biomass-fired cogeneration unit in Varna

·        Moststroy, Trace аmong bidders to build second metro diameter in Sofia

 

 

ANALYSIS:

 

·        Report on Bulgaria - a storm in a tea kettle

·        Bulgaria aims to be SEE power exports leader, but not at any cost

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

 

Bulgarian economy beats forecasts with 7% Q1 growth

The Bulgarian economy expanded by a surprising 7% year-on-year in the first quarter of 2008, the national statistical authority said on Monday. The GDP figure for the period under review is 13,483,500 levs at current prices or 1,760 levs per capita. Gross value added increased 7.6% The contribution to value added of the services industry is up 2.5% while the share of the industrial sector fell to 32.1%. The robustness of the German economy most probably accounts for the faster pace of export versus import growth as well as for the GDP growth in general, said Russia Stefanov from the local analytical unit Center for the Study of Democracy. There is no clarity on the assumptions that the national statistical authority is making about the gray sector's GDP contribution which pre-empts more accurate assessment of the figures, said Stefanov. 'The services industry, with its great exposure to the gray sector, is generating growth, a sign probably that some subsectors like education, health care and repairs are starting to report their revenues.' The Q1 figure beat our earlier target of 5.7%, Desislava Nikolova from Raiffeisen Research was quoted as saying by news agency SeeNews. Support came from the construction sector which held steady despite a decline in the number of issued building permits. Personal consumption expenditures accounted for 84.5% of Q1 GDP, up 5.7 percentage points year-on-year. Export of goods and services rose 9.2% over the review period while imports grew at the slower pace of 5.8%.

WB: Bulgaria's economic growth stable

Improved harvests in Bulgaria and Romania will boost their economies this year amidst a general regional scenario of slowing economic growth, the World Bank said on Wednesday. "A much better harvest in 2008 than last year, as is now likely, may well lead to faster growth in Bulgaria and should support the likely pickup in Romania," the bank said in its EU10 Regular Economic Report. Both Bulgaria and Romania reported higher-than-expected economic growth in the first quarter of the year. Bulgaria's economy grew by a real 7.0% on the year, compared to 5.5% in the first quarter of 2007, and Romania recorded record high economic growth of 8.2% versus 6.1% in the first quarter of last year. The EU10 report monitors macroeconomic and reform developments in the EU10 countries - EU newcomers Bulgaria and Romania, which joined the bloc in 2007, plus EU members since 2004 - Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia and the Czech Republic. The EU10 countries have adjusted "relatively well" to the ongoing global financial turmoil, rising inflation and commodity prices and in a climate for weak economic growth in mature markets, the bank said in the report. Although economic expansion in most EU countries is set to slow in 2008, led by substantially slower economic activity in Estonia, Latvia, and Lithuania, the overall pace has remained reasonably robust. Economic growth, moreover, should be broadly unchanged in Bulgaria and Poland this year, and should pick up in Hungary and Romania, it added. "Some cooling down of economic activity is welcome [...] given the imbalances in some countries of large current account deficits and external debt, and high and rising inflation," the report's principal author Ivailo Izvorski said. High inflation which has risen substantially in part because of rising global food and energy prices and in part because of buoyant economic expansion ... "is becoming an increasingly important problem, especially for countries with slowing economic expansion." The World Bank noted that strong revenues and spending restraint have helped improve fiscal positions this year in Bulgaria and Romania. According to the bank, investments in infrastructure are an essential part of the EU10's growth and convergence strategy and the countries should focus on building national procedures and practices that can strengthen the effective management of public infrastructure resources to use more fully EU funds. "Strategic planning needs to be closely linked to multi-year fiscal frameworks. Capacity for appraising the economic cost-benefit of projects should improve, while project implementation will need to be supplemented by monitoring capacity and ex-post reviews," it said.

Bulgaria needs a predictable business environment

 

The Deputy Chairman of the American Chamber of Commerce (AmCham) in Bulgaria Anthony Hassiotis said that the members of the chamber would like to work in a transparent environment where the same rules apply to all, during the unveiling of an EU-US economic conference on Monday."We expect a predictable environment, which can exist solely if supported by a strong legal framework," Hassiotis said, adding "US companies invested 120,000 million US dollars into the EU in 2006, and we must help Bulgaria be as involved as possible in these relations."The Chairman of the German-Bulgarian Chamber of Commerce Bertram Rollman said that Bulgaria has laws, but that they are not applied in practice. He added that the increasing bureaucracy in Bulgaria and throughout the EU must be combatted.German Ambassador Michael Geier and Deputy US Ambassador Alexander Karagiannis were also present.

High inflation frustrates economy

The average relative growth of consumer prices in Bulgaria since the start of 2008 (May 2008 compared with December 2007) is already 4.7%, data of the National Statistical Institute (NSI) show. Price growth on a yearly basis (May 2008 compared with May 2007) is 15%, data show. The consumer price index (CPI) for May 2008 compared to the previous month is 100.5%, i.e. monthly inflation is 0.5%. At the same time, the government forecast for the three-year period 2008-2010 shows that inflation for 2008 will amount to 6.9%. This means that almost 70% of the inflation set for 2008 is already a fact, and the autumn and winter inflationary period is still in the future. According to some estimates, real inflation for the poorest is approaching 20% (from 12.5% for 2007, official NSI data), while it is slightly more than 8% for the richest. If one takes into account the most pessimistic estimates that 50% of Bulgarians spend 70% to 80% of their income for food, then it turns out that for them, inflation amounts to almost 20% since the start of 2008, at official inflation rate of 4.7%. If the government tries to solve this problem with funds from the budget excess, increasing the size of social spending (pensions, relief funds, etc.) before the elections, this will give an additional impetus to the so-called food inflation. The growth in food prices should stimulate production of agricultural goods, but in Bulgaria, just the opposite has happened. Agricultural production declined in 2007. While total industry production is up 8.8% in April 2008 compared with April 2007, April's production rate has decreased by 0.7% from the preceding month.

Bulgaria ranks 64th globally in terms of trade related tariff barriers

Bulgaria ranks 64th among 125 countries in terms of trade related tariff barriers in 2007, a ranking compiled by the World Bank shows. Bulgaria lags considerably behind the Central and Eastern European countries, while countries such as the Czech Republic, Hungary, Poland, Slovakia and Slovenia share the 21st spot with Western European countries such as Italy, France, Germany, Austria. Bulgaria was overtaken by countries such as the Republic of South Africa, Paraguay, Egypt, China, Ecuador and ranks higher that countries such as Chile, Cyprus, Uruguay and Thailand. Romania occupies the unenviable 116th spot in the ranking. The survey of the World Bank shows that in 2007 most developing countries continued to improve trade policies supporting greater integration. Countries with lower barriers tended to have stronger, more consistent trade and export performance over the past decade, the survey shows. The ranking shows that those countries that have reduced their trade barriers, and are doing well on trade facilitation and institutions, have also experienced sustained increases in their volume of trade. While high-income countries still have the world’s lowest tariff barriers, many developing countries are converging rapidly. Georgia, Haiti, Armenia and Mauritius, are among the 10 countries having the lowest tariffs. Developing countries showing large declines in import restrictions since the beginning of this decade include Egypt, which reduced its average MFN tariff from 47 to 17 percent; the Seychelles, dropping its average tariff from 28 to eight percent; India, reducing from 32 to 15 percent; and Mauritius, which reduced its average from 18 to just 3.5 percent.

Bulgaria ranks 4th in construction growth in EU

Bulgaria holds the 4th place in construction growth in the European Union, according to Eurostat.The data is from the first quarter of this year, informs the Lithuanian agency Delfi, cited by BNR.The highest construction growth is in Slovenia – 32.2%, followed by Romania – 31.8% and Poland – 14.5%. In Bulgaria the construction growth is 13.1%. For the EU countries as a whole this indicator is 2.1%.For the same period of time, the volume of construction has dropped down at the most in Hungary – with 19.2%, Spain - 7.2% and Estonia – 3.7%.

 

Bulgaria ranks last in EU by innovation investments

 

Only 16% of enterprises in Bulgaria develop innovative activities thus ranking the country last among the members of the European Union.In other EU countries 40% of the enterprises invest in innovations, according to the Chair of the Bulgarian Industry Chamber Bozhidar Danev. In Bulgaria the innovation investments represent only 0,48% as share of the Gross Domestic Product (GDP) while in 2000 this share has been 0,52%. As comparison, in Sweden the innovation investments represent 3,82% of the GDP.The share of scientists and engineers on the labor market in Bulgaria is 3% while in Belgium this percentage is 7,9%, according to Danev.

 

 

 

Bulgaria's pipeline politics: development of both South Stream and Nabucco projects

The Caspian Basin energy export contest is often portrayed as one in which there can be only one winner - either Russia on the one hand, or the United States and European Union on the other. Officials in Bulgaria, a country that is envisioned as a key transit hub in competing energy-export plans, say that burgeoning European demand for gas means that all sides can profit."There is not enough gas," Bulgaria's Energy Minister Petar Dimitrov told EurasiaNet, commenting on Europe's current supplies. "When there is not enough gas, we [must] look for [additional] sources."Bulgaria stands to gain both economically and politically from the current scramble to establish new energy export routes. Two pipeline projects - one called Nabucco, which has strong US and EU support, and another Russian-backed pipeline, dubbed South Stream - would pass through Bulgaria. Despite expert doubts about whether there are sufficient resources to justify the construction of two pipelines, Bulgaria is touting both options. "It is our policy to encourage as many such [pipeline] projects as possible to pass through our territory because this increases our national security," Bulgarian Prime Minister Sergei Stanishev told EurasiaNet in an interview.Stanishev is currently leading a Bulgarian trade mission to the United States, and he is scheduled to meet US President George W. Bush in Washington on June 18. Energy is among the issues on the agenda. More broadly, Bulgaria is interested in expanding trade relations with Washington. Sofia is also seeking to secure visa-free travel rights for its citizen seeking to visit the United States.Bulgaria is uniquely situated as it pursues both Nabucco and South Stream. Though part of the European Union, Bulgaria has strong cultural connections to Russia. "When it comes to relations with Russia, few are the nations that share positive feelings, and even fewer are those that share feelings of love," said Dimitrov, the energy minister. "We are one of the few countries that have a good relationship with Russia, and I don't think that this is a disadvantage."While expert estimates warn that there might not be sufficient supplies of gas in the near future to fill both Nabucco and South Stream, Dimitrov points to longer term studies that show the two pipelines would be able to meet just one-fifth of Europe's overall demand by 2030. "The needs of the European Union are huge," he said.Dimitrov added that EU member states so far have been supportive of Bulgaria's participation in South Stream, even though it is a rival to Brussels' preferred route - Nabucco. Indeed, South Stream seems to run counter to stated EU policy, which seeks to reduce its current dependence on Russian gas supplies. "The EU reaction has been definitely a positive one," the energy minister said. "It was explicitly emphasized that Nabucco is a priority project, but South Stream is necessary."Both South Stream and Nabucco remain in the planning stages, and neither is slated to begin pumping gas before 2012. In terms of becoming a reality, South Stream seems to be in a stronger position. For one, Russia - the world's largest natural gas producer, as well as a major importer of Central Asian energy - can guarantee that South Stream will be filled to capacity. In addition, Russia's energy giant Gazprom already has 50/50 pipeline ownership deals in place with the governments of Hungary and Bulgaria. Serbia is also firmly on board the South Stream project. Nabucco, meanwhile, remains mired in uncertainty. The chief concern is that there will not be enough natural gas supplies to make the route economically viable. As it stands now, Nabucco would heavily depend on Azerbaijani gas supplies. Nabucco's backers would like to secure the participation of Central Asian suppliers - namely Turkmenistan - before making a final commitment to the project, which has an estimated price tag of about $8 billion.Russia's lead in the pipeline race might be greater, except Moscow appeared to overestimate its bargaining strength. At first, both Hungary and Bulgaria balked at joining South Stream because Moscow's initial offer was heavily weighted to the Kremlin's advantage. "Gazprom wanted majority ownership of the pipeline but we could not agree to such an option, and now we agreed to a 50/50 ownership of South Stream," Dimitrov said.While South Stream seems close to the point where construction can begin, Stanishev hinted that a change in circumstances could still derail the project. "The South Stream is a question of bilateral relations and economic reasoning like every other project," the prime minister said.Meanwhile, Prime Minister Stanishev indicated that Nabucco's future remained up in the air. "We are still researching the [supply] possibilities in the Caspian region," he said.

 

Used cars form 84.1% of Bulgaria's import

 

Some 188,430 automobiles were imported in Bulgaria in the first five months of 2008, a Road Police representative said at the Sofia automobile exhibition. The number of used cars imported is 158,500, or 84.1% of the total import. The announcement of such data is a precedent for Bulgaria, because this kind of information should be paid for, according to an ordinance by the ministry of finance. The normal practice elsewhere in the European Union is to publicly announce automobile registration data.

 

Bulgaria pavilion at EXPO 2008 visited by over 5000 people in one day

 

Over 5000 visitors came to see the Bulgarian Pavilion during the first day of the World Exhibit in Saragosa, according to the Director of the Plovdiv Fair's press-center Katya Yaneva.EXPO 2008 began on June 14 and will continue until September 14. The expo's theme is "Water and Stable Development". 101 countries participate in the Saragosa exhibit."The best display so far", "I am glad to have become acquainted with a new country such as Bulgaria", "Thanks from a distinguished collector", "Very beautiful and interesting", "I really loved the water curtains". These are some of the opinions the visitors have written in the "impressions" book.Quite a few of the visitors have requested tourist information about Bulgaria, mainly about our sea resorts as well as contacts with tourist agencies. Others have been impressed by the Pavilion's façade with the letters from the Cyrillic alphabet.The water curtains, the large (32 by 7 meters) three-dimensional picture of the Rila Lake, the Panagurishte Treasure are among the biggest attractions and have been visited by most of the guests. The design includes modern audio-visual effects comparable to those of other, bigger, EXPO 2008 participants.Ivan Sokolov, Executive Director of the International Plovdiv Fair has prepared and organized Bulgaria's participation in the World Exhibit. Sokolov was very pleased with Bulgaria's presentation displaying the country's unique sites, waters and tourism opportunities.

EU-US partnership and Bulgaria business climate conference held in Sofia

The economic partnership between the European Union and the US and the business environment in Bulgaria are the topic of the conference organized by the American Chamber of Commerce and the German-Bulgarian Industrial Chamber Monday in Sofia.
The discussion focuses on competitive possibilities, investments, the EU funds absorption, access to financing, reduction of administrative obstacles and creation of new employment opportunities.Transportation Minister Petar Mutafchiev is presenting an analysis "Bulgaria's EU membership and transatlantic collaboration - strong and competitive business through transparent access to financing".Other conference articipants include Fianace Minister Plamen Oresharski, the Minister of Regional Development and Public Works Asen Gagauzov, Labor Minister Emiliya Maslarova and Environmental Minister Dzhevdet Chakarov.

OLAF to scrutinize Bulgaria over EU funds

Till the end of 2008, OLAF will keep a close eye on Bulgaria. "Bulgaria will be inspected by OLAF representatives who will watch out for misappropriation of EU funds, "Bulgaria's Deputy PM Meglena Plugchieva stated before the Bulgarian National Radio. In the coming months OLAF officials will stay in Bulgaria for at least two weeks a month. This is one of Brussels's 'innovations' for tightening the direct control on the disbursement of the EU funds in Bulgaria after it emerged that the EC did not have much trust in the authorized Bulgarian bodies. Presently, OLAF representatives examine 19 signals about frauds with EU funds in Bulgaria. Apart from the OLAF checkups, the Lotar monitoring system will be introduced in Bulgaria. The system helps monitoring and management of the EU funds in all ministries dealing with financing coming from the EU structures. Bulgaria is the first country where such a system is introduced. The LOTAR implementation was discussed by Plugchieva and a group of EC experts during her first visit to Brussels.In the meantime yesterday Meglena Plugchieva rose voice against an overly smeared image of Bulgaria as an unattractive, unwanted and unconvincing EU member, a lamentable reputation that our country has to clear.While the ten countries from the first EU accession wave enjoyed a more staunch economic and political support, Bulgaria was forgotten and coped with all the difficulties by itself, Plugchieva stressed.
According to Minister Plugchieva, the EU membership is a crucial change and a big challenge in economic, political and social aspects, a change which can hardly be made without mistakes.

Bulgaria to lose �300 M annually from reduced greenhouse gas emission quotas in 2013-2020

 

According to unofficial information, Austrian metallurgy giant Voest Alpine has excluded Bulgaria from the short list of countries in which the company carries out studies regarding investing in green-field projects, Politimi Paounova, Managing Director of the Branch Chamber of Ferrous and Non-Ferrous Metallurgy told a news conference on Wednesday. one of the reasons is the lack of sufficient carbon dioxide trading quotas, which the European Commission could extend to Bulgaria in the 2008 - 2012 period. The Austrian company has planned to invest 5,000 million euro in the construction of a new mill.At the same news conference Philippe Rombaut, CEO of fertilizer producer AGROPOLYCHIM, said that in order to attract investors in new metallurgical or cement production facilities no problems regarding carbon dioxide should exist, otherwise investors would prefer countries outside the EU, such as Ukraine and Turkey.Bulgarian Industrial Association Chairman Bozhidar Danev said that Bulgaria is going to lose 300 million euro per year in the 2013-2020 period, if amendments to the EU directive on the trading of greenhouse emission quotas come into effect.Danev recalled that Bulgaria had received strongly reduced quotas until 2012. According to him, this is a good reason that this country's national position should be defended on time instead of seeking solutions in court. Three hundred Bulgarian enterprises have not received their complex permissions yet, which is an additional risk of reducing the national quota, Danev also said.Eight countries affected by European Parliament's draft decision, including Bulgaria and Hungary, have undertaken steps to attack it. Hungary proposes that one and the same rate (18 per cent) is introduced for all member states and no differentiated approach is applied under which Bulgaria, for example, should reduce its carbon dioxide emissions by 49 per cent by 2020. Business circles in Bulgaria support the Hungarian positions and insist that Bulgaria MEPs also support this motion.The possible decision of European Parliament for differentiated approach at such a high rate for Bulgaria would lead to reduced investment in production or decreased export of investment to third countries, a double or triple increase of energy prices and a serious delay in Bulgaria's economic growth, the BIA Chairman added.The business circles recommend also to discuss the opportunity 2007 to become the base year for determining carbon dioxide quotas rather than 2005, as cited in European Parliament's draft decision.In another debelopment later in the day, Deputy Economy and Energy Minister Yavor Kuyumdjiev denied the assertions that Voest Alpine has given up the idea of the investment, but conformed the calculations of the Bulgarian Industrial Association in case the amendments to the relevant European directive become a fact.

Director of meat processing companies: VAT on foods should be reduced

 

It is normal to reduce the VAT on foods having in mind the obvious jump of prices, Svetla Chamova, Executive Director of the Association of Meat Processing Companies said in an interview for FOCUS News Agency. According to Chamova, Reducing VAT would keep the prices of ready products at their current level, which would be beneficial for consumers.

Chairman of Bread Manufacturers Federation: Gray economy within bread production companies is due to high VAT on foods

 

The gray economy in bread production companies is mainly due to the high VAT on foods, since it is the gray economy companies that sell at much lower prices compared to companies with legal activity, Dimitar Lyudiev, Chairman of the Federation of Bread Manufacturers in Bulgaria said in an interview for Focus News Agency. Lyudiev said that a decrease of VAT on foods would alleviate production companies. He added that this was a common practices in countries like Greece and Germany.

 

Turkish demand for Bulgarian wheat

Turkish traders are coming up with purchase offers for Bulgarian rapeseed and wheat at, respectively, 400 euro and 200 euro per ton without taxes, said Krasimir Avramov, chairman of the local association of grain producers. The Bulgarian farmers are currently unable to hook up the Turkish buyers because the local harvest season is just getting underway. The early indications from the barley harvest in the Dobrudja region are for a yield of 4,200 kg/ha. The average yields in the Pleven region and across Southern Bulgaria are reported at 3,600 kg/ha and 3,000 kg/ha. Barring any prolonged rainy spells, domestic barley output is expected to hit 600,000 tons or double the 2007 crop. Traders have already put in orders for 120,000 tons of barley. The solid milling wheat, barley and rapeseed output will exert no downward pressure on prices as they are supported by demand for energy crops, said experts. At the moment, the local farmers are not prepared to go lower than 350 levs/t for wheat from the new crop.

 

Some draft projects, others make protests

 

Meanwhile, about one hundred farmers gathered again in front of the Agriculture Ministry, insisting for a minimum purchase price of milk of EUR0.40, release of the suspended subsidies and of the money promised by the Government because of the poor crop last year. Moreover, protesters demand value added tax (VAT) on investments in agriculture to be refunded within a month, as well as amendments to the Excise Duty Act, ensuring eased terms for the purchase of fuels needed for cultivation of agricultural land. Instead of explaining to the excited milk producers they are not spacemen entitled to special preferences, that neither the State nor the European Union are charity organizations and they provide financial assistance against strictly set terms, Agriculture Minister Valeri Tsvetanov announced that a national strategy for the development of milk and meat production would be prepared, BGN16MN would be released to help farmers due to the poor harvest and another BGN3MN to assist stock-breeding. In a far more professional style the new Agribusiness Council with the Agriculture Ministry, set up during the week, tabled the issue for reducing VAT on foods below the currently effective 20 per cent. Branch organizations represented in that body will collect data for the tax rates on foodstuffs in European countries and will specify the proposal for the VAT reduction in our country.

 

Beer market underperforms in 2008

 

The rainy spring season in Bulgaria is causing trouble for breweries, Vladimir Ivanov, chairman of the Union of Brewers in Bulgaria (UBB), said. Beer is an extremely seasonal product and if the weather is not very sunny in the warm season, sales do not grow, Ivanov said. Rising energy and utility prices and the decreasing purchasing power of Bulgarians because of high inflation aggravate the situation. Growth in the beer sector for the first five months of 2008 is below 1%, UBB data show. The quantity of beer sold is about 1.984 million hectolitres. Keeping sales at the same level might even be considered a success. Sales went up by an unprecedented 18% in the warm winter season of 2007 (between January and May). Growth for the whole year amounted to 9%. Last year, we had permanent summer with temperatures reaching as high as 40 degrees, which is unlikely to happen this year, Anton Nenov, executive director of Bolyarka BT, said. If the sector registers growth between 2% and 3% in 2008, this may be considered a success, he added.The sports event of the year, the 2008 European football championship, will hardly compensate for bad weather, Alexandar Grancharov, executive director of Carlsberg Bulgaria, said. The Bulgarian national team does not participate in the event, and Bulgarian football clubs have serious problems, Anatoliy Popov, general manager of Kamenitza, said. Growth by 2% to 3% is normal, because the market is highly competitive and fairly saturated, Doncho Hadjiev, marketing manager of Zagorka, said. We have prepared special campaigns to meet increased consumer demand in summer, Hadjiev added.

 

Corporate culture still weak in Bulgaria

 

Only 10% of Bulgaria's public companies have joined the National Corporate Governance Code, data show. Eight months following its promulgation in Bulgaria, negative attitudes are felt concerning some of the document's recommendations. For that reason, the Bulgarian Industrial Capital Association (BICA) and the Association of Bulgarian Investor Relations Directors (ABIRD) conducted a survey among 80 public companies about the trends in their development, the benefits from their public status, and the observance of the code. Almost 42% of public companies are trying to conceal information concerning their financial and operating results. It is disturbing that only 33% of the companies are ready to reveal to the public their goals for the next few years. Such information is very important for taking investment decisions. For about 25% of firms, information about majority ownership and voting rights is obscured. In addition, only 25% of investor relations directors responded that they reveal frequently or relatively frequently additional information beyond minimum requirements.

 

Business angels come to Bulgaria

 

The concept of business angels is still rather exotic in Bulgaria. It became known only in latest years as a potential source of risk financing. There are already several examples of projects that have started in this way. The financial website Moite Pari was backed by the American Tom Higgins, currently a managing partner at the Balkan Accession Fund. Other Bulgarian companies such as retail chain Piccadilly and the website netinfo.bg have also used the help of business angels. In fact, some of the Bulgarian investors with a business angel profile do not even know they are dealing with exactly this type of financing. In most cases, angels do not go it alone. They organise in networks. These are for-profit or non-profit organisations specialising in establishing connections between investors and entrepreneurs. Usually, a membership fee, or the so-called success fee, is paid upon the closing of a deal. Entrepreneurs, for their part, are charged for the presentation of their projects in front of business angels. The fee is usually a fixed sum.
In 2008, there are already more than 300 such networks worldwide. Bulgaria is not an exception. Two organisations of this kind have been established here recently. The Bulgarian Business Angels Network (BBAN) was founded in 2007 and has a current membership of six business angels, including two corporate ones. We are on the verge of helping one Bulgarian entrepreneur and I think that we will have a deal within a week or two, Borislav Borislavov, managing partner in BBAN, said. About three months ago, the Bulgarian Business Angels Association (BBAA) was registered. It has six members, too, and has collected between 50 and 60 application forms with business startup ideas.

 

There are no reasons for declaring emergency situation on freight transport market

 

There are no reasons for declaring of emergency situation on the market of the freight transport director of the National Transport Policy Directorate Dimitar Savov said at a press conference at the Bulgarian Ministry of Transport, Focus New Agency reporter informed. According to Savov there is no reason to declare emergency situation on the market even in close future. According to him cargo transportation in the last seven years was increased double.

 

 

 

 

 

 

 

 

Bulgaria's tourism revenue may treble to � 9 B per year by 2011

Bulgaria's tourism revenue can treble to around 9.0 billion euro ($14 billion) a year by 2011 if the country urgently raises investment in infrastructure and advertising, an industry official said on Thursday. Tourism is an important source of revenue for the Bulgarian economy, generating about 10% of the country's gross domestic product and helping the country of 7.6 million people partly finance its rising current account deficit. Last year tourism revenue totalled nearly three billion euro. [] This figure could double, even treble in two, three years," the chairman of the Bulgarian Hotel and Restaurant Association (www.bhra-bg.org), Blagoi Ragin, told SeeNews in an interview. Bulgaria's tourism revenue rose 10.8% to 2.285 billion euro last year, the government's Tourism Agency said earlier. The government says the share of tourism businesses operating outside the taxation system is still large. Ragin sees the completion of the Trakia and Cherno More motorways as the most urgent steps that could help boost tourism revenue. In May, Bulgaria cancelled a 715 million euro deal with a Portuguese-led consortium for the completion of Trakia motorway linking its western border with the Black Sea port of Burgas after the consortium failed to secure financing for the project. The government in Sofia plans to spend 100 million levs ($79.5 million/51 million euro) from its budget this year on the construction of the remaining 117 kilometres of the 360-kilometre motorway, local media reported. Earlier this year Regional Development Minister Asen Gagauzov said he hoped the forming of a public-private partnership for the completion of the Cherno More motorway to be launched by September at the latest. The 100-kilometre motorway, of which just one-tenth has been competed, will link Burgas with the other major city on the Bulgarian Black Sea coast, Varna. Bulgaria could attract one million tourists from neighbouring Romania yearly after improving its road infrastructure, Ragin said. Many Romanians travel by car to Bulgarian coastal resorts to spend their summer holidays. The number of Romanian tourists visiting Bulgaria doubled to over 750,000 last year, official data indicated. Both countries joined the European Union in 2007. The number of foreign visitors to Bulgaria, including tourists and transit visitors, rose three percent to some 7.726 million last year. The country attracted 5.151 million foreign tourists, down 0.1% from 2006. Bulgaria should at least double or even treble investments in advertising itself as a tourism destination to attract more visitors, said Ragin. Investments in promoting Bulgarian tourism now total five to six million levs yearly, Ragin said, adding that Croatia envisages 100 million euro for tourism advertising this year. Awarding concessions on abandoned crop dusting and army airfields, and hunting reserves would also contribute to the growth of tourism revenue, just like the development of golf, spa and rural tourism would do, he said. Four golf courses operate in Bulgaria. A number of investors plan to build golf courses near popular tourism destinations such as the Black Sea coast and the ski resort of Bansko. The Tourism Agency said earlier it expects Bulgaria to attract 6.0 billion euro in tourism revenue yearly by 2013.

 

 

 

 

 

 

 

INVESTMENTS:

 

Foreign Direct Investments in Bulgaria down to � 1.23 B in Jan – April 2008

According to preliminary data released by the Bulgarian National Bank, foreign direct investment in Bulgaria for the January – April 2008 period amounted to EUR 1228.2 million (3.7% of GDP) compared to EUR 1437.6 million (5% of GDP) attracted in January – April 2007. The attracted equity capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January – April 2008 amounted to EUR709.9 million, which was 57.8% of the foreign direct investment. This is down by EUR 95.2 million compared to that attracted in the same period of 2007 (EUR 805.1 million). Receipts from real estate investments of non-residents amounted to EUR 471.2 million compared to EUR 507.3 million for January – April 2007. The attracted equity capital on privatization deals with non-residents (that have acquired over 10% of the equity in a Bulgarian enterprise) reported in January – April 2008 did not increase, compared to an increase of EUR 1.4 million in January – April 2007. The attracted equity capital on non-privatization deals totaled EUR 709.9 million in the reporting period, compared to EUR 803.8 million for the same period in 2007. The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers’ credits and debt securities) was positive, amounting to EUR 361.9 million in January – April 2008, compared to a net other capital, amounting to EUR 522.7 million in the same period of 2007. According to preliminary data, the reinvested earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January – April 2008 are estimated at EUR 156.5 million compared to EUR 109.7 million in the same period of the previous year. By country, the largest investments in Bulgaria for the reporting period were those of Greece (12.7% of the total foreign direct investment), the Luxembourg (12%) and the Netherlands (10.2%). According to preliminary data in January – April 2008 Direct investment abroad increased by EUR 407.6 million compared to an increase of EUR 34.7 million in January – April 2007. The invested equity capital abroad in 2008 amounted to EUR 404.4 million, compared to EUR 56.4 million in January – April 2007.

US investments in Bulgaria reach well over USD 1 B

The US rank higher and higher in the list of countries with most investments in Bulgaria totaling over USD 1 B for 2007, according to Borislav Boyanov, President of the American Chamber of Commerce.Bynov spoke before Darik radio Tuesday.In addition, the USD 1 B does not include all investments such as the purchase of the Bulgarian Telecommunication Company (BTC) by AG Capital Partners, a deal worth over EUR 1 B itself.If all investments, outside the official data were to be included, the US would move 2 to 3 ranks ahead in the list of countries investing in Bulgaria.Boyanov reminded about the meeting between Bulgarian President Georgi Parvanov and US President George W. Bush several years ago when it was concluded that while the political relations between the two countries were at their highest peek, there was a lot to wish regarding economic relations."A lot positive had happened in the last several years in economic relations between Bulgaria and the US and we are very optimistic about the future. Of course Bulgaria's NATO and EU memberships, the 10% corporate tax, the agreement for joint military facilities of the US and Bulgaria have contributed a great deal", Boynov explained."The daily turnover of goods and services between the US and the EU is over USD 2 B and Bulgaria is definitely part of it", according to the American Chamber of Commerce President."The EU is the most important US strategic partner and the EU joining of Bulgaria is of primary importance since it guarantees political and economic stability and predictability in both countries relations", Boyanov continued.The Camber President further explained that the world economy crisis and its global consequences did not affect any essential aspects of the Bulgarian - US economic relations. The US investors keep coming because Bulgaria is among those so-called emerging markets, continuing to create favorable business conditions.Some small investors such as the British began withdrawing from the real estate market in Bulgaria while for US investors there is no noticed withdrawal. one of the reasons, according to Boyanov, is the fact that US investors in the country are all big companies.The American Chamber of Commerce is hoping that more and more small and medium US businesses would become interested in Bulgaria since those companies are the backbone of the US economy and Bulgarian small and medium businesses would benefit from collaborating with them.The finance crisis in the US, on the other hand-side, had created opportunities for Bulgarian investments in the US with some Bulgarian companies seriously considering those opportunities.

Investments in real estates increase in 2008

A recent survey conducted upon the request of the real estate investment company Karrat Group Ltd. shows that more real estate purchases are planned for 2008 as compared to last year. Several factors contribute to this favorable development. First, a report by UniCredit Group suggests that there is still real estate shortage in Central and Eastern Europe, enhanced by the population's growing income. Therefore, expectations are that there will be a moderate growth in the sector despite the global credit crunch.Second, analysts point out that 15% of Bulgaria's population plans to purchase residential property in the next 10 or more years. Demand is highest among young to middle-aged people, mostly business professionals with income above the country's monthly average. Finally, a recent online survey conducted by the British Global Edge suggests that UK buyers are still interested in Bulgaria's property market.Karrat Group Ltd. is currently working in close collaboration with Colliers International and some of Sofia's leading construction and design companies to implement a project called City of Fountains, which aims to change traditional apartment building conventions and create the first up-market complex of its kind.The project's main benefits are excellent location (only 350 m from Business Park Sofia, with great transport connections to the city centre, airport, and other areas), unrivalled sports, recreation, and social amenities, as well as outstanding design and quality implementation.The complex comprises a territory of 35 000 square meters. There will be 18 residential and 2 office buildings. The total number of apartments will be 750. The construction process is divided into four main stages. The first stage includes the construction of 6 residential buildings, and the Restaurant building, which will have a 2-level underground garage. Construction started on 15 March 2007 and is planned to end on 15 July 2009.

 

 

 

Bulgarians invest � 400 M abroad

The Bulgarian investments abroad increased nearly 12 times and reached 407,6 million euro in the first four months of 2008. They stood at 34,7 million euro in the corresponding period of 2007. The foreign investments keep on decreasing and Bulgaria's foreign trade gap continues growing. This negative data was announced by the Bulgarian National Bank (BNB) yesterday. Bulgaria's foreign trade deficit for the period between January and April 2008 stands at a total of 2.55 billion euro. The deficit for the corresponding period of 2007 amounted to 2.1 billion euro. The direct foreign investments in the period January-April, 2008, decreased by 209,4 million euro and reached 1.22 billion euro (3.7% of Bulgaria's GDP).

Austria's Cuubuus to invest �100 M in real estate projects in Ruse

 

Austrian construction and engineering company Cuubuus plans to invest 100 million euro ($155 million) in two real estate projects in Bulgaria's Danube port of Ruse, a representative of the company said on Tuesday.Ruse Mayor Bozhidar Yotov said that a contract [for a 15.4 hectare land plot] will be signed by the end of July," Cuubuus's legal representative Todor Tabakov told SeeNews. Under the project, the company will invest 50 million euro in retail, entertainment and residential facilities, he added. The company is also working on another 50 million euro project for a logistics centre in the city near a bridge over the Danube linking Bulgaria and Romania. Cuubuus (www.cuubuus.at), which has announced plans to invest 450 million euro to establish a chain of its Aquario retail brand in Bulgaria, has already opened units and is developing projects in six Bulgarian cities, including the capital Sofia and the Black Sea port of Varna.

Italy's Enel to invest in Stara Zagora rose production ops

Italian gas and water utility Enel, owner of the Maritsa Iztok 3 thermal power in Southern Bulgaria, will team up with Gruppo Ciccolella to develop a rose production site in the Stara Zagora area, said Mike Foster, executive director of Enel Operations Bulgaria. The company official said the 160 mln euro investment will be part of the power station's environmental program. Earlier this year, the two partners signed a feasibility study memorandum. According to Ciccolella, a 70 ha site would enable an annual output of 50 mln roses. The Italian company hopes to create 300 new jobs with the launch of its rose hothouse operations. In related news, Foster said Enel is looking into installing solar panels on the Maritsa Iztok 3 site. The current plans are to complete the project in 2008.

Bulgarian Tesy unveils � 2 M logistic terminal

Bulgarian heating appliances manufacturer Tesy, based in the northeastern town of Shumen, cut the ribbon for a 3.9 mln Bulgarian levs ($3.09 mln/2.0 mln euro) logistic terminal, said marketing head Todor Lilov. The storage facility is 10 m high and covers an area of 5,250 sq m. The adjacent asphalt area is 2,900 sq m. The logistic centre has nine ramps for freight loading and unloading and uses both back-to-back and drive-in systems. The terminal uses Oracle Warehouse Management System (WMS), which is the first stage of the introduction of enterprise resource planning (ERP) system, Lilov said. The storage facility created 26 jobs including a six-member administrative staff.With a headcount of 470 people and over 30 years of experience, Tesy (www.tesy.com) is among the most dynamically developing heating appliances makers in Europe.

City of Svilengrad to join solar power project

The Svilengrad municipality is primed to take a stab at the energy business with the announced plans for a power generation partnership with a private investor.The economic committee of the municipal council has accepted the proposal of Sofia-based Regent Capital to set up a joint limited liability company, Svilengrad Energy, for the production of solar power.Svilengrad Energy will build a 5MW photovoltaic power plant.The municipality will provide a 12.3 ha site for the project in the area of the Siva Reka village.The land asset will comprise 25% of Svilengrad Energy's capital.This is the second solar power project announced in the area in less than a year.The Solar Hold company plans to invest 250 mln euro in the construction of 10 solar plants near the village of Pashovo.

NEC of Japan looks for investment opportunities in Bulgaria

 

The President of the State Agency for Information Technologies and Communications (SAITC), Plamen Vachkov, met with NEC c/o Tasuya Mori in Sofia on Thursday, the Agency said in a press release.Vachkov familiarized his guest with the good business climate in Bulgaria attracting foreign direct investments and the excellent opportunities the information and communication technologies sector can offer in this respect. He stressed that the development of the sector is one of the government's priorities. It has well established traditions and highly qualified specialists, Vachkov said.Mori said that NEC is interested in expanding its operation outside Japan pointing out that European and the new members of the European Union in particular, Bulgaria included, are the most attractive in this respect.Vachkov assured Mori that the Japanese companies engaged in the area of information and communication technologies are welcome to invest in Bulgaria and that they can rely on the SAITC support and assistance.

US investors want Bulgarian nuclear plant

US companies have showed interest in the decommissioned units 3 and 4 of Kozloduy Nuclear Power Plant. They'd like to rent the two reactors and restart them, sources from PM Sergey Stanishev's delegation revealed for the The Standart following his conversation with US President George Bush. "Not long ago a Canadian company came up with the same proposal," officials from the Bulgarian Ministry of Economy and Energy reminded. During the talks in Washington a question whether it is possible to build unit 7 came from the American side, The Standart learnt. Experts disclosed that the interest on the part of the US must have been born by the fact that 30% from the preparations necessary for the construction not only unit 7 but also unit 8, were already carried out. Moreover, the entire procedure of asking the neighbouring countries' consent to construct them has been completed. A construction site has been designated. The project research has also been completed.

 

 

 

 

 

COMPANIES:

 

Oil companies may rethink investment plans

Rising oil prices on a worldwide scale are an increasingly worrying issue for oil companies and especially fuel retailers. In Bulgaria, the low purchasing power of the population does not allow fuel sellers to maintain big margins, while rising fuel prices lead to a drop in consumption. The average sales figures of filling stations are lower now than in 2007, Emil Kosturkov, LUKoil Bulgaria's deputy director general retail sales, said. For business to be effective, sales should not fall below an average of 5 million tonnes of fuel per day. In Bulgaria, the amount sold is between 5 million and 7 million tonnes. Filling stations would not make any profit if they sold fuel only, Kosturkov added.
Such trends are not favourable for possible new players on the retail fuel market. Rumour has it that one of the large fuel companies intends to withdraw from Bulgaria, Kosturkov said. Bulgaria's market is very competitive and it is possible that part of Western companies reconsider their investment plans, Andrey Delchev, chairman of the Bulgarian Petroleum and Gas Association, said. In addition, logistics expenses for fuel transportation are becoming too high, Valentin Zlatev, general director of LUKoil Bulgaria, said.Surging oil prices also bring the trend of market consolidation. Because of decreasing margins and high operating expenses, some 500 to 1,000 smaller oil companies will disappear by the end of 2009.

Bulgarian Air companies to fly directly to US

Bulgarian air companies will be able to fly directly to USA.This became possible after Bulgaria received a certificate for a higher category under the Safety program of the US Federal aviation administration (FAA).A representative of FAA handed the document to Bulgarian prime minister Sergei Stanishev in the Washington Media Museum Newreum.
In the presence of PM Stanishev, the minister of foreign affairs Ivaylo Kalfin and the US state secretary John Negroponte the two countries signed an agreement for cooperation in the field of prevention of the distribution of weapons for mass destruction and fostering of the relations in the military and defense fields.The Bulgarian ministry of interior and the US department on energy signed a memorandum for understanding for cooperation in the prevention of illegal traffic of nuclear and other radioactive materials.

Bulgargaz wants increased price of natural gas

Bulgargaz has demanded that the price for public supply of natural gas in the third quarter of 2008 be 19.60 per cent higher than the current price. The distributor has submitted a proposal to this effect to the State Commission for Energy and Water Regulation. The proposed price is 494.67 leva/1,000 cubic meters, exclusive of VAT. Despite the unfavorable international conditions, the price proposed by Bulgargaz remains one of the lowest in the EU and lower than the prices in neighboring countries. Speaking in Bourgas, political analyst Ivan Krustev said it is very important for Bulgaria to have an energy strategy envisaging different options of fuel prices. The Government is currently working with one optimistic option, envisaging that the price of crude oil will be below 100 US dollars per barrel, Krustev said at a seminar on the processing and pricing of oil products, organized by the Lukoil refinery. According to Krustev, the price of oil will increase in the next year and a half. He cited the complicated situation in the Middle East and the forecast that there will not be a sharp appreciation of the US dollar or a significant increase of oil extraction, only growing demand.Transport Minister Peter Moutafchiev reiterated Monday that the excise duty for fuels will remain unchanged until the end of 2009 and the government is committed to this without going counter the EU requirements. Commenting the renewed protests of fuel motorists and fuel producers, he said that a working group with the government will be meeting June 17 organizations which are directly or indirectly affected by the situation on the fuel market and will propose to the government an action plan.

 

Auto distributor Balkan Star sees 20% rise in Varna area sales

Local group Balkan Star Automotive, the Bulgarian distributor of auto makers Mercedes, Chrysler, Jeep, Dodge, Mitsubishi and Setra, has invested 7 mln euro to launch in Varna, on the Black Sea, its biggest auto service and sales enter in the country. The investment, deployed by Vienna Real Estate EOOD, the property management unit of the group of companies in Bulgaria, should be recouped in a decade. The outlet has a 2.33 ha footprint and a build area of over 0.8 ha, a capacity designed to meet the needs of the rapidly growing Varna area market where it anticipates a 20% increase in sales this year. That forecast means it will move over 400 new vehicles in the region by the end of 2008. Over 95% of area sales involve a lease purchase arrangement, said the company.

Holding Roads ready to finance Trakia motorway

Bulgaria's Holding Roads is ready to finance the remaining 117 kilometres of the Trakia motorway, Ivan Ivanov, member of the board of directors, said at the opening of the holding's new subsidiary Roads Stara Zagora. According to our calculations, it is a question of about BGN 200 million, Ivanov said. The holding may start construction with own funds, and the state may start repaying in a year and a half. The holding is ready to work under the public-private partnership scheme or to participate in a tender procedure for the three lots of the Trakia motorway. The price for building a kilometre of road is currently between EUR 2.5 million and EUR 2.7 million, but may rise to EUR 3 million. Therefore, the state should assign the project as soon as possible, Ivanov said.

Navigation Maritime Bulgare privatization contract initialled

 

The draft privatization contract for the sale of a 70 per cent stake in the Navigation Maritime Bulgare EAD shipping company with German consortium KG Maritime Shipping for 440,100,000 leva (225,000,000 euro) was initialled on Tuesday, the Privatisation Agency (PA) said.The draft will go shortly before the PA Supervisory Board for approval, after which it will be submitted for approval to the Council of Ministers as well.

 

 

 

 

 

 

 

Kremikovtzi steel mill employees seek state support to set up European company

 

Kremikovtzi steel mill employees staged a protest in Sofia on Tuesday demanding the support of the state in solving the company's problems. The protesters arrived at Sofia's Alexander I square in 65 buses and split into three groups going to Parliament, the Economy and Energy Ministry and the Council of Ministers where they presented a declaration. "Kremikovtzi employees seek the support of the state to transform the company into a European steelworks", the declaration read in part. "We are convinced that if we join our efforts we could reach positive results, namely the transformation of Kremikovtzi into a European company through capital and environmental investment, observation of norms and commitments harmonized with the European resolutions, world competitive product," the trade unions organizing the protest said in the document.Metalworkers' Federation of Podkrepa Chairman Lyudmil Pavlov said that Indian-Canadian company Essar Steel had shown interest to buy the company and had prepared a programme for the its development until 2012, but it was rejected. Essar Steel forecasted the company's output at between 2.5 and 3 million tonnes of steel in 2012 and promised to preserve all productions and jobs.Consulting company Merrill Lynch could not select a new owner of the company as it represents incumbent majority shareholder Pramod Mittal, Pavlov also said.Economy Ministry's Director Valentin Grouev invited the protest leaders to a meeting with Deputy Minister Nina Radeva but they refused.Pavlov told the protesters at the Council of Ministers' building that if no decision is found about Kremikovtzi, the next protest will block Sofia until the issue is solved.The protesters also submitted an appeal to Prime Minister Sergei Stanishev demanding urgent implementation of insolvency procedure and recovery programme rather than liquidation of the steel mill. Later on Tuesday, the Economy and Energy Ministry said in a press release that it is doing its best within its legal power to preserve Kremikovtzi in a working state until the election of a new owner, and to ensure the exchange of ownership under the most favourable conditions for the employees.The Economy Ministry does not accept the fact that the protest is directed to the institution, which has so far consistently protected the interests of the steel mill in the efforts to find a favourable solution of the situation, the press release added.The Ministry underscored its decisive role for the conclusion of an important agreement between Kremikovtzi, the National Electric Company, Bulgargas and the Bulgarian Railways, as well as for the normal running of the European Commission's monitoring of the performance of the Individual Viability Plan.

 

Sofia municipal companies receive financial marks for 2007

 

The heating utility of Sofia "Toplofikazia" has a BGN 15 M balance loss for 2007, according to the financial analysis of the municipal companies in the capital.Last year the heating utility had revenue of BGN 356 M and debts in the amount of BGN 313. Among other municipal companies, the notorious firm "Sofia Properties" had a balance profit of BGN 930 000. However the municipality gives the company a poor mark and proposes that the company's previous leadership was not relieved from responsibility about "Sofia Properties" dealings.Another notorious municipal company "Tramcar" ended 2007 with a loss of BGN 530 000. The recommendations here also include keeping the company's leadership responsible and requesting from the new one to prepare a remedial plan for 2008.The company "Galateya", managing student vacation camps also received a negative financial mark. The company ended 2007 with a loss of BGN 408 000 compared to the profit of BGN 31 000 in 2006.Transportation companies and the company "Parkings and Garages" received a positive financial mark.The "Egida" security company received recommendations to reconsider the ways for contract signing. In addition, the recommendations include taking the horse base of the security guards for "Borisova Gradina" (Sofia's main park) from the company's capital and including them in the capital of the company "Sports Sofia". "Egida" had a profit of BGN 97 000 in 2007, compared to BGN 61 000 in 2006.

 

Irish Aer Lingus to start flights to Sofia

 

The Irish company Aer Lingus will start direct flights to Sofia from Dublin on October 28th, 2008, according to Irish publication "Irish Times".The Dublin-based carrier will fly twice a week to the city, which is its second destination in Bulgaria.The airline already flies from Dublin to Burgas on the Black Sea during the summer.

Austrian waste management firm M-U-T enters Bulgaria

 

Austrian waste management company M-U-T has entered Bulgaria as part of its expansion strategy in eastern Europe, its regional manager for the area said on Wednesday. We started our activities in Bulgaria, we have been planning these activities for a long time and very seriously," M-U-T's regional manager for eastern Europe, Ann Lehner, told SeeNews on the sidelines of a news conference. M-U-T has decided to enter Bulgaria because the country, as a member of the European Union (EU), has to abide by EU restrictions concerning environment protection, and EU supports its newcomer with special funds for this purpose, Lehner said. Bulgaria, which joined the EU in 2007, must reduce its hazardous emissions to meet stringent EU requirements. The Black Sea country gets financial aid from the EU Instrument for Structural Policies for Pre-Accession (ISPA) programme and the pre-accession funds PHARE and SAPARD. The country also receives financing for solid waste management from the European Bank for Reconstruction and Development (EBRD). M-U-T's customer base consists mainly of municipalities and the company is already in talks with some Bulgarian municipalities, Lehner said but declined to name them. The company usually enters public-private partnerships for the building and operation of plants for waste water treatment and solid waste treatment. Local authorities have a share of between 30% and 70% in the partnerships, she added. Lehner sees the cost of a medium-sized waste treatment plant starting from 3.0-3.5 million euro ($4.7- 5.4 million). M-U-T (www.m-u-t.at), set up in 1932, operates in a number of countries worldwide including Croatia, Romania, Serbia and Slovenia in southeast Europe. The company produces waste collection vehicles and provides water cleaning and waste treatment technologies.

French Dalkia to launch biomass-fired cogeneration unit in Varna

 

French Dalkia will launch a biomass-fuelled co-generation capacity in its heating utility in the Black Sea city of Varna, Bulgaria. The 4.8-MW co-generation swallowed over 4.0 mln Bulgarian levs ($3.17 mln/2.05 mln euro) and will significantly cut the utility’s dependence on natural gas. It will start operations in November 2008. The heating utility Toplofikatsia Varna was renamed Dalkia Varna after becoming 100-pct owned by the French company, said its director Iliya Nikolaev. In about a month Dalkia Varna will finish a basic survey on the Biomass project aiming to measure the efficiency of straw, wood and other energy crops used for heating production. According to Nikolaev, Dalkia Varna will need 10,000 tonnes of straw annually to generate 15-20 MW of heating energy, or 20 pct of its total heating output. Dalkia plans to cement its presence on the energy services market. It has signed a five-year energy management contract with Mall Varna for full-servicing of energy, cooling and air conditioning systems.

Moststroy, Trace аmong bidders to build second metro diameter in Sofia

Metrotrace, a group of companies comprising Trace Group Hold, SB Engineering and Trace Sofia, is one of the of the candidates that have submitted an offer in the procedure for the construction of the second metro diameter in Sofia.Another public company will also take part in the procedure in alliance with other partners. This is Moststroy, which has submitted an offer jointly with Hochtief and Glavbolgarstroy.The remaining five candidates include Turkey's Dogus, Stanilov EOOD, Spain's Obrascon-Huarte-Lain and FCC Construction and Geotechmin. The name of the eighth participant in the procedure was not immediately clear. The number of the submitted bids was announced by Stoyan Bratoev, executive director of Metropolitаn EAD. Media representatives, however, were not allowed during the opening of the bids. The commission, that will select the successful candidate, will review the bids. It will continue to be in session behind closed doors and after the documents are assessed the selected candidates will be notified on the opening of the financial offers. The second metro-diameter will link the Nadezhda road junction with the Central Railway Station, St Nedelya Sq., the National Palace of Culture (NDK) and Cherni Vrah blvd. The stretch will have a total of seven metro stations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANALYSIS:

 

 

Report on Bulgaria - a storm in a tea kettle

Author: Martin Karbovski, Publication: Standart Daily

Prognoses in Bulgaria have never been very reliable. They range between exulted optimism and total pessimism, whereas the truth is always somewhere in between. The Bulgarian politicians have always used prognoses-making in one and the same way, depending in the position they are in. If, for example, a politician is vested with power, he is very likely to readily sink the boat that his partners and he are in, but will not give up the rule at any cost. Which is worse, when a Bulgarian politician is in opposition, he will sink the whole state, so as to ascend to power. Brussels, however, sees things a little bit differently. Nobody wants to cause a tempest in a teakettle, however much we, the always-pessimistic Bulgarians, may want it. In this line of thoughts, the prognoses for Bulgaria's death in the EU are grossly exaggerated, including the haunting threat of a shameful excommunication. Without ignoring the risk that such prognoses may carry, we still should think logically - Bulgaria cannot be excluded from the processes going on in the EU and, being a new member state and a rather confused one, the country is treated with a good dose of benevolence, just like Italy was some tome ago. Point of fact, Italy still presents a serious challenge to the EU regulations. Many Bulgarians just wants some good guys to come and shoot the bad guys down. But this was Moscow's way. Brussels methods are radically different, gentlemen!We have a better prognosis for PM Stanishev - actually there is no serious risk of protective clause for two reasons - so far nobody had made such thing and nobody knows how such measure will affect the stability of the union. After the referendum in Ireland Bulgaria turns out to be the problem of the ghetto when the city encounters problems. The EC would not like to have instability in a country as Bulgaria - after all we are situated on the Balkans, in the time of serious fuel crisis and at the same time we have an important economic growth. In view of its bureaucratic tranquility Brussels should have to eat the sour apple or otherwise risks to get the poisoned one. Another prognosis - depriving of Bulgaria's sovereignty, won't happen. Meaning that Bulgaria won't be forced down to change its cabinet. The first reason is the real economic growth. The second is more important - the political factors to come are still unknown to Brussels. They prefer the known evil rather than a new one.And last, but not least - another plus for Stanishev, which remains difficult to understand for many rightists, is that Europe considers him a democrat.Of course, if you expect a favourable report on July 23, you'll be disappointed.Brussels will do its best to specify the problems with the EU funds' disbursement and will freeze the sums under almost all funds and programs. The commission is not interested in the ruling figures, its concern is that the allotted money shouldn't be misappropriated.And if tomorrow (but not later) the ruling triple coalition in Bulgaria ceases stealing funds, it has all the chances not only to survive, but to even keep a serious resource of influence till next year. According to Brussels, an uncompromising report with concrete criticism is a more effective move than triggering a safeguard clause but with unclear results.There's another sign for this, as well - OLAF increase their representatives in Bulgaria (from one person they increase them to 25). This means that they are still willing to work with Bulgaria and discuss the problems. The check-up is a form of trust.All the rest is a scarecrow, used by the opposition which once again failed to make the right move. This will be proved if we turn to be right in our forecasts.

Bulgaria aims to be SEE power exports leader, but not at any cost

Author: Iva Doneva, Publication: SeeNews

Bulgaria will aim to regain its role as a leading power exporter in southeast Europe (SEE) but not at any cost, industry officials said.Bulgarian electricity exports used to cover 70% of the power deficits in SEE before the country closed four reactors of 440 megawatts (MW) each at its sole Kozloduy nuclear power plant to address safety concerns of the European Union. Bulgaria closed the first pair of reactors in 2002 and the second one at the end of 2006, just before joining the bloc, which reduced the country's power exports to a trickle.To make something for the region, we firstly need to provide for domestic consumption," Kozloduy's chief executive officer, Ivan Genov, told SeeNews.If the country had not closed the second pair of reactors, its economic growth would have been 8.0% last year, not 6.0%, the country's Economy and Energy Minister Petar Dimitrov told a recent international energy conference held in Varna.Since 2006 Bulgaria has announced ambitious plans aimed at restoring its role as a leading power exporter in SEE. It plans to build a 2,000-megawatt nuclear power plant in Belene, and an up to 700-MW coal-fired power plant, upgrade its existing generation capacities and set up a mammoth energy holding company.The number of domestic industrial consumers is rising as the country's economy reaps the benefits of EU membership and the state should firstly provide for their needs if it wants to secure a sustainable economic growth, Genov added.Without a competitive energy sector, it is impossible to achieve high economic growth," the head of the nuclear Bulgarian nuclear association Bulatom, Bogomil Manchev, told the same energy conference.Bulgaria should take into consideration its energy safety and look after the interests of the local consumer, not only the household consumers but industrial ones as well, as their number is rising and so does their demand," the head of the country's nuclear energy watchdog, Sergey Tsochev, told SeeNews.The energy ministry has forecast domestic electricity consumption at 39.8 terawatthours (TWh) this year, up 3.0% from 2007. According to estimates of the country's transmission system operator, consumption will be five to six percent higher this year.Estimates of the ministry show that Bulgaria will cover just 13% of the electricity deficits in SEE this year, down from 37% in 2007. The ministry has also forecast that electricity consumption in the region would rise by more than 2.5% to over 242 TWh this year, compared to an increase of 2.4% to 236.1 TWh last year.Bulgaria is expected to export around 4.5 billion kilowatthours of electricity this year, unchanged from 2007, the chief executive officer of the country's dominant power exporter NEK, Lyubomir Velkov, told SeenNews.Most officials polled by SeeNews believe the country will not suffer power deficits, while others disagree.Bulgaria has no energy problem at the moment but it has a problem with the closure of the Units Three and Four at Kozloduy because when electricity consumption is rising, the coal-fired power units start operating in higher gear and pollution problems emerge," Genov said.Bulgaria will be faced with energy problems if it fails to launch new generation capacities, having in mind the expected rise in energy consumption, to be fueled by accelerating, added Genov.Concerns go even further. Energy experts lobbying for the restart of Kozloduy's Units Three and Four think that power cuts are possible in the winter months.I am sure that there will be power cuts. We were very close to this situation last winter but I think it will happen this winter," Rasho Parvanov, the head of exploitation operations at Kozloduy, told the energy conference.