BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 21 – 28 MAY 2010 )
Sections/headline briefs:
MACROECONOMY:
· Italgen buys Bulgarian wind unit
· Finance minister: Bulgaria to focus on export-oriented industries
· Bulgarian banks racing to finance exporters
· Bulgaria expects 6 million foreign tourists in 2010
- Bulgarian crude steel output and exports rose in Q1
- Bulgaria's 1st electric light truck unveiled in Sofia
- MachTech Expo 2010 international exhibition was opened
· ICCB: Working for more than two sides
INVESTMENTS:
· Lukoil says invested in Bulgaria refinery USD 1 B
· AmCham: Bulgaria should adopt active policy on investment
- Bulgarian minister insists on privileges for foreign investors
· Orchid Developments opens EUR 120 M trade centre in Varna
COMPANIES:
· Knauf, Technogips launch plasterboard plants in Bulgaria
· Grupo Ortiz Partners with Electra steps in Bulgaria
· UK JKX secures weatherford rig for drilling in Bulgaria
· Carrefour opens first hypermarket in Varna
· EVN interested to acquire 908 MW coal-fired power plant
· Western Union to expand in Bulgaria
· Ryanair to fly to Plovdiv
· DB Schenker becomes Bulgaria's 9th railway freight carrier
THE CRISIS:
· Guarding the guardians
· Bulgarian, Romanian finance ministers to discuss EU funds
MACROECONOMY:
Italgen buys Bulgarian wind unit
Italgen, the energy generation arm of Italian cement giant Italcementi, has acquired a 49% stake in Gardawind, the owner of two Bulgarian wind farms with total capacity of 18 MW, the company announced.The price of the deal was not disclosed.The wind farms of 9 MW each are located in the Kavarna region, of which one is already operating while the other is currently under construction.Kavarna I wind farm was started by Leitwind in September 2009, with the installation of self manufactured turbines, resulting from the technological know-how of the Leitner Technologies Group which is based on a direct drive generator concept.So far, Italgen has mainly operated in Italy serving the energy needs of the Italcementi Group.Currently 100% of the energy produced comes from renewable sources, specifically from 14 water power stations located in Piedmont, Lombardy and Veneto, interconnected by means of own HVDC lines for a total length of approx. 400 kilometres.
Finance minister: Bulgaria to focus on export-oriented industries
One of the top three priorities of the Bulgarian government is to develop export-oriented production in country, stated Deputy PM and Finance Minister, Simeon Djankov.The statement made at a meeting with local businessmen in the northeastern city of Razgrad is perhaps the first time Djankov has explicitly emphasized focusing on the growth of manufacturing.According to the Deputy PM in charge of the economy, one of the three goals that the Borisov government has to achieve by the end of its term in 2013 is precisely to stimulate the Bulgarian industry.“The only way that small countries such as Bulgaria can recover from the economic crisis is by concentrating on export-oriented industries,” Djankov declared.In his words, the two other major priorities of the Cabinet are fighting corruption and organized crime, and achieve tangible progress in infrastructure construction.“The level of corruption that we have been faced with in the last 10 months exceeds several times our prior expectations. By the end of our term we have got to achieve a new type of government because at present the idea of statehood in Bulgaria does not really exist, and we have to build it from scratch,” the Finance Minister stated.As far as the third priority that he outline is concerned – making substantial progress on infrastructure construction, Djankov admitted that Northern Bulgaria is lagging behind, and that the government had to boost large-scale projects located there.With regard to the revised 2010 State Budget Act approved Wednesday by the Cabinet, which sets Bulgaria’s project deficit at 3.9% at the end of the year, the Finance Minister said foreign investors would not be turned off by a higher deficit and that the important thing was to avoid raising the taxes.“Deficit in itself is good for economic development. What worries the foreign investors is whether in the future the Bulgarian state will have to increase the taxes. Our government has the firm intention not to raise any taxes,” explained Djankov.Until recently, however, the Borisov government seriously considered the increase of the value-added tax from 20% to 22-25%. Djankov’s new statement about the budget deficit is a notable change of course as over the winter and spring he insisted that his government would do whatever needed to keep the deficit as low as possible, or at least under 3%, in order to meet the criteria for applying to join the euro zone waiting room, ERM II.
Bulgarian banks racing to finance exporters
Eager to track down promising projects to lend support to, Bulgarian banks are scrambling to loan to exporting businesses, offering lower interest rates, bankers said yesterday.Export-oriented companies, particularly production enterprises, are faring best of all Bulgarian businesses as the economic crisis is peeling away. But the small number of exporters is prompting lenders to bring down interest rates.Bankers said financial institutions are determined to hunt down credit niches as they seek to get rid of accumulated resources. Since the economy imploded, Bulgarian banks have gorged on liquidity in the form of juicy deposits but the tight credit market did not allow them to lend it out. Businesses are either scaling down operations, therefore needing no borrowed financing, or simply do not want to take on more debt at the moment, market insiders told Dnevnik.Nine of ten loan applicants get the thumbs-up at the moment as they are very well aware of their capacity to repay a loan. The challenge is to find these customers, a process that takes much longer in the current circumstances, according to bankers. Before the crisis, only three or four in ten applicants obtained loans and demand was much higher.In another trend that has emerged recently, business loans will this year be used mostly for operating capital. There will be some time before plans to invest, buy new capacity and upgrade technological processes come back to companies’ minds, bankers predict
Bulgaria expects 6 million foreign tourists in 2010
A total of 8-8.5 million tourists will make their vacations in Bulgaria in 2010, and some 6 million are expected to come from abroad.This means that there will be a 5% increase in the number of foreign tourists year-on-year, according to a forecast of the Institute for Analysis and Estimates in Tourism.More tourists from Germany, Russia, Central Europe, Romania, Serbia, and Macedonia are expected to visit the Bulgarian Black Sea resorts in the summer of 2010 compared to last summer.According to data of the Institute, Bulgarian tourists spent BGN 575 per capita on vacations in the summer of 2009, and are expected to spend at least as much this summer.The prices of tourism packages are forecast to be about 20%-25% lower in Bulgarian Black Sea resorts.According to Stoyan Marinov from the Varna Tourist Chamber, the hopes that Bulgarian Black Sea resorts might benefit somehow by the fact that some foreign tourists might be turned away from Greece as a result of the strikes there are totally unfounded as the clients traditionally going to Greece and to Bulgaria are different in terms of their demands.Marinov said Bulgarian tourist operators and resorts have to try to compete with their Turkish counterparts who offer very good service at very competitive prices.
Bulgarian crude steel output and exports rose in Q1
Production of crude steel and long products in Bulgaria rose in the first quarter of 2010, as did exports of longs and flats. However, domestic sales declined when compared with Q4 2009, the Bulgarian Association of the Metallurgical Industry (BAMI) informs Steel Business Briefing.Bulgaria produced 191,800 tonnes of crude steel in Q1 2010, up 4% quarter-on-quarter and 11% year-on-year. It was all produced through the electric arc furnace route, following the demise of Bulgaria’s largest steelmaker, Kremikovtzi, which closed its blast furnace capacity at the end of 2008.The most likely fate of the bankrupt steel plant, expected to be confirmed in the next two weeks, is the liquidation of the company and sale of its assets, SBB is told by local steel industry sources.Production and domestic sales of flat steel products in Bulgaria fell by 7% to 89,900 t and by 40% to 27,700 t respectively in Q1 compared to the previous quarter. However, flats exports in Q1 totaled 58,000 t, an increase of 4% on Q4 2009.Production and exports of long products in Q1 rose by 18% to 132,800 t and by 12% to 80,500 t respectively quarter-on-quarter. Domestic sales of long products, meanwhile, decreased by 17% q-o-q, totaling 54,900 t.While 37% of Bulgaria’s steel exports went to fellow European Union countries in Q4 2009, this share rose to 66% in Q1 2010.
Bulgaria's 1st electric light truck unveiled in Sofia
Bulgarian producer of electric and LPG forklifts Di-Ven Ltd has presented the first Bulgarian electric light truck.Di-Ven Ltd, which is stationed in the Danube town of Lom, and is one of the founding members of the Bulgarian Electric Vehicles Industrial Cluster (EVIC), has unveiled its electric truck project at the machine building fair “Mach Tech Expo 2010” taking place May 26-28, 2010, at the Inter Expo Center in Sofia.Electric transport car model ETK 021 from the PONY series is a light battery-driven truck – a highly maneuverable environment friendly vehicle designed to transport loads of up to 1 tone in an urban setting.It is suitable for supplying stores and stands with goods, and transporting tools and materials by people offering services on the spot in larger cities.Possible modifications to the ETK 021 electric transport car of the Di-Ven Ltd company include installing a garbage disposal container, a cover, or additional compartments for transporting food products.The AGM battery of the electric light truck last for at least two years, and do not require additional maintenance. Their charging takes about 12 hours. The truck can run 50 km for the cost of 10 kW/h of electricity.The Di-Ven company has used explicitly Bulgarian-made parts for its manufacturing except for the electronic system, which accounts for about 10% of the production costs.
MachTech Expo 2010 international exhibition was opened
MachTech Expo, an international mechanical engineering exhibition, was opened at Inter Expo Centre in Sofia by Economy, Energy and Tourism Minister Traicho Traikov on Wednesday.This is the second edition of the exhibition which shows the achievements of nearly 150 companies from 17 countries. It features some of the newest metal cutting and metal working machines on the market, machine tools, metal products, welding equipment, laser systems for metal working, and pneumatic equipment. The event is organized by the Bulgarian Mechanical Engineering Chamber, the Bulgarian Industrial Association and the Federation of Science and Technology Unions in Bulgaria. The participants are manufacturers and distributors from Bulgaria, Britain, China, France, Germany, Italy, Japan, the Republic of Korea, Poland, Slovenia, Spain, Switzerland, Taiwan, Turkey, the US.MachTech Expo is part of the Technological Forum 2010 event and focuses on the role of innovations for Bulgaria's sustainable development. "We actively support Bulgarian industry though Operational Programme Competitiveness," Traikov said. The programme includes two schemes - for innovative companies which are getting off ground and for technological upgrading of small and medium-sized enterprises. Funds are provided for satisfying internationally recognized standards, for the establishment of a network of organizations supporting the business, as well as for introduction of energy-saving technologies. In Traikov's words, this year there will be 16 procedures for granting financial assistance totalling 665 million euro. MachTech Expo will be on until May 29. The Seventh International Scientific and Technological Congress is held within the frames of the exhibition. The programme envisages a roundtable on the absorption of funds from OP Competitiveness, a discussion on "Technologies and Competitiveness", a workshop on "Promotion of the Competitive Development of Business". The March 2010 statistics on industrial production show that the processing industry grew by 6.3 per cent, and the mining industry by 4.8 per cent year-on-year. Compared with February, the processing industry registered a growth of 34.7 per cent, and the mining industry of 7.3 per cent. The turnover index confirms the fact that industry has pushed off the bottom: in March 2010, the processing industry turnover increased by 18.2 per cent, and the mining industry turnover by 15.9 per cent year-on-year.
ICCB: Working for more than two sides
The Italian Chambers of Commerce Abroad (Assocamerestero) serve as bilateral associations of businessmen and professionals, officially recognised by the Italian state.
The Italian Chamber of Commerce in Bulgaria (ICCB) was set up in 2001 on the initiative of both Italian and Bulgarian entrepreneurs. Its foundation stemmed from the need to offer stronger support to companies developing bilateral trade between Bulgaria and Italy, as well as economic and cultural relations.The ICCB is part of Assocamerestero’s network, uniting 75 Italian chambers of commerce around the world in 49 countries with 140 offices. It has more than 24 000 associated companies of which 70 per cent are local companies doing business with Italy.The ICCB’s membership in Assocamerestero, whose headquarters is in Rome, allows it to develop Italian-Bulgarian trade and economic relations on a global multinational scale.Among the ICCB’s priorities is to encourage and stimulate bilateral economic and trade ties by offering consultancy services and helping small and medium enterprises (SMEs) and branch organisations.The ICCB’s "Exhibitions" department is particularly active in this sense by helping Bulgarian companies take part in some of Italy’s biggest trade fairs, such as those in Milan and Rimini with which the ICCB has signed an agreement of co-operation.The result is that, since January 2009, about 160 Bulgarian companies have taken part in various initiatives of Italian trade fairs and had the chance for b2b meetings with Italian companies.The ICCB also works on special projects co-funded by the Italian ministry of economic development, in tandem with other European countries.The ICCB’s Europe – Italy Desk programme is designed to help companies from new EU members and also those willing to take part in the 2007/2013 EU programmes.It offers knowledge, expertise and competence of Italian experts in projects funded with EU money.Another of ICCB’s initiatives – "Sustainable environment" – integrates a number of initiatives dedicated to the renewable energy sector and the environment. Its main purpose is to create and develop a network of international business contacts between countries with advanced environmental technologies and countries in urgent need of implementing them, especially in water and waste treatment and renewable energy sources. The programme also offers SMEs access to international projects and a chance to co-operate with business partners through efficient exchange of experience. By stimulating innovations in the sector the ICCB aims to achieve a multiplying effect on the entire economy.Aerospace is a specially designed project dedicated to air and space technologies. It also serves as an ambassador of Italy’s highly innovative and advanced technologies in the sector on foreign markets. This is a sector which, with its seven billion euro turnover, and 38 000 high-trained workers, ranks seventh in the world and fourth in Europe. Last, but not least, is the Campania Region ‘s Operational Centre for European Regional Cooperation, which has been active with the ICCB as part of the European Fund for Social Development’s 2007/2013 Open Region Campaign.
INVESTMENTS:
Lukoil says invested in Bulgaria refinery USD 1 B
Lukoil, Russia's largest non-state oil producer, announced it has invested USD 1 B into an upgrade in its Bulgarian refinery Lukoil Neftochim Burgas to meet EU requirements.“The total volume invested is over USD 1 B and half of this sum, about USD 500 M, has been invested in the past two years,” Lukoil President Vagit Aleperov said as cited by local media.According to him a number of production facilities were built and automated management systems were installed. These and other programs increased refining depth to 76.39%. Light product output grew to 67% and losses were trimmed over 75% to 0.9%.Earlier this year the Bulgarian refinery of the Russian oil company wrapped up planned maintenance after closing the 2,000-barrels-per-day refinery at the Black Sea port of Burgas for a month of repair works.Lukoil Neftochim Burgas is a major supplier of liquid fuels, petrochemicals and polymers on the Bulgarian market. The refinery is among the leading suppliers of these products not only on the Balkans but also in Europe and the USA.Lukoil Bulgaria EOOD, in 1999 became part of the big Lukoil family following the privatization of Lukoil Neftochim Burgas, the biggest refinery on the Balkans.
AmCham: Bulgaria should adopt active policy on investment
Red tape and cumbersome licensing procedures are the main hurdles foreign investors encounter in Bulgaria, according to Valentin Georgiev, executive director of the American Chamber of Commerce in Bulgaria (AmCham).US Commercial Counselor Scott Pozil said Bulgaria should focus efforts on encouraging investors that already operate on the market and by offering a large number of integrated offers for potential investors.An organisation should be set up to inform foreign businesses of the investment opportunities available in Bulgaria as well as of the incentives offered at a national and local level, Pozil said.Georgiev revealed that two years ago AmCham started cooperation with an unnamed company which was eager to pour USD 60 million in the Bulgarian economy. The plans have still not been put into practice, partly due to the global economic downturn but also due to other obstacles. Georgiev noted that the company received no assistance from either InvestBulgaria Agency -- the country’s investment promotion authority, or the local government in the town it wanted to invest in.“The local government reacted in a very strange way. They told the company they would provide no more assistance than required by statutory rules, there was no commitment to the project whatsoever,” Georgiev pointed out.AmCham proposed the formation of a consultative council bringing together Bulgaria’s major business organisations and the government that will assist in making decisions on changing the investment climate instead of drawing up strategies.
Bulgarian minister insists on privileges for foreign investors
Bulgaria needs to be proactive in offering foreign investors preferential conditions, says Regional Development Minister Rosen Plevneliev.Plevneliev believes the privileges for foreign investors are a must; he has pointed to the Czech Republic as an example since foreign investors there are sold land at preferential prices and are provided with the needed infrastructure.The Minister confirmed the recent announcements of Economy Minister Traicho Traikov that the government was working on amendments of the Investments Encouragement Act, which are expected to help generate a better business climate.During his visit to the city of Varna for the opening of the largest shopping center in the city and the region, Grand Mall Varna, Plevneliev commented that Bulgaria must identify its economic sectors that will general economic growth.He pointed out that the country should go from focusing on consumption establishments such as the shopping malls to focusing on production.“There are indications of such an economic transformation in the country,” the Regional Development Minister said while also revealing that the Economy Minister is working on an economic growth strategy that is to be ready before the end of 2010.
Orchid Developments opens EUR 120 M trade centre in Varna
Investment fund Orchid Developments Group Limited will open the Grand Mall Varna shopping centre, located in the northern Black Sea city of Varna, today (May 27). The company has invested more than EUR 120mn in the facility. The total built-up area amounts to 150,000 square metres, 80% of which are trade areas. Construction works started two years ago and were supposed to be completed this summer. The early opening was spurred by expectations for a good summer tourism season in the city. Orchid Developments plans to wrap up the construction of the three towers at the shopping centre, which are to offer residential, office and hotel areas, next year.
COMPANIES:
Knauf, Technogips launch plasterboard plants in Bulgaria
Knauf, the German supplier of construction materials and local company Technogips announced they have put into operation part of their plasterboard plants near the power complex Maritsa East.The two companies launched the construction of the two plants nearly simultaneously in 2007 after qualifying for certification as First Class Investor by InvestBulgaria Agency, the local investment promotion authority.The plants will use the by-product from the flue gas desulphurisation operations of nearby power complex Maritsa East.The projects of Knauf and Technogips are worth BGN 120 M and BGN 95 M respectively.Knauf Bulgaria is a subsidiary of Knauf Austria, which stepped in Bulgaria in 1997 after the acquisition of the Gipsofazer plant in Vidin, North-western Bulgaria.Technogips is owned by Balkanstroy, established in 1994.
Grupo Ortiz Partners with Electra steps in Bulgaria
Madrid-based construction firm Grupo Ortiz is about to enter the Bulgarian market by joining forces with Spain's energy group Electra Holding.According to Electra Holding CEO Jose Oskar Leiva Mendez the construction company will hold a majority stake in the newly formed joint venture company, called Ortiz Electra, to work on infrastructure projects in Bulgaria.The partnership is expected to be officially announced within weeks.“This is very important news for us because Electra wants to expand its activities into Bulgaria's infrastructure market.” Mendez told local Capital weekly.“We want to have our own construction company to work on the implementation of our projects here. This is the healthiest company on the Spanish market and has no debt,” he added.
UK JKX secures weatherford rig for drilling in Bulgaria
Britain's JKX Oil & Gas, the operator of the B1-Golitza license in Bulgaria, has signed on a CCC-500 drilling unit through Weatherford for two wells in Bulgaria’s onshore B1-Golitza Block, the company announced.It is expected that the two wells will spud in the middle of the third quarter and the beginning of the fourth quarter of 2010, respectively.The first well in the program, SOS, will test a potential 20-30 Bcf prospect at 1,500 meters, up dip of the depleted Stary Oryahovo gas field, discovered in the 1960s. Results of this well are expected in early October 2010.The second well, S54, will also be testing a potential 20-30 Bcf prospect at a depth of 600 meters with results expected by the end of the fourth quarter of 2010.Interests in the B1-Golitza block are held by JKX (40%), Balkan Explorers (Bulgaria) Limited (a 100% subsidiary of Aurelian Oil and Gas PLC) (30%) and Sorgenia International B.V.
Carrefour opens first hypermarket in Varna
Carrefour, the second largest retailer worldwide, opened its first hypermarket in the city of Varna. It is located in the newest and biggest shopping center Grand Mall Varna.This is the forth store of the chain in Bulgaria - the first Carrefour hypermarket opened doors in March, 2009 in Burgas; on 15 April, this year, the chain opened a hypermarket in Plovdiv, and on 21 April the Carrefour store in The Mall, Sofia, was opened.The Carrefour hypermarket in Grand Mall Varna, which spreads over a 6 200 sq. m. retail space, represents the concept of the chain "Everything under one roof".The customers will have the opportunity to make their choice among 50 000 goods - food and non-food, consistent with Bulgarian taste and traditions.The new hypermarket opens more than 400 new positions.
EVN interested to acquire 908 MW coal-fired power plant
Austria's utility EVN is interested in acquiring the majority stake of Italy's energy company Enel in the local coal-fired power plant Maritsa East III located in the Maritsa East complex in southern Bulgaria, Reuters informed. The Austrians have not yet started direct talks with Enel. EVN provides electricity to 1.6mn people in the southern part of the country and is looking for investment opportunities in power production to back long-term supplies to its customers. Enel owns 73% of the equity capital of the entity set up to upgrade and operate the plant and the state controls the remaining stake through national power grid operator NEC. In March, Enel informed about intentions to sell its controlling stake in the power plant and only a few days later economy and energy minister Traycho Traykov unveiled thatNEC may sell its interest as well. A year ago, Enel completed a EUR 700mn modernisation programme, which increased the plant's electricity production capacity by 8.1% to 908MW, reduced sulphur dioxide emissions by 94% and extended the operational period of the four generators by 15 years. After the end of the 15-year operational period of the upgraded units, all assets will remain in control of NEC. Local media has it that the UK utility International Power is also interested in the power plant.
Western Union to expand in Bulgaria
U.S.-based money transfer company Western Union plans to expand in Bulgaria to fully tap the potential of the market of the latest European Union arrival, a senior company official said.We plan to expand our network in the country and are looking for every opportunity to do so," Western Union country manager for Romania and Bulgaria Alexandru Badulescu told SeeNews in an interview.Western Union entered Bulgaria in 1994 and Romania in 1996. It has a network of more than 4,400 locations in Romania and 1,200 in Bulgaria.The economies of the two Black Sea neighbours are similar in many ways but differ in size. Romania is roughly three times bigger than Bulgaria in terms of gross domestic product and population.Our business is bigger in Romania, of course, for the simple fact that the country's population is larger and there are more migrant workers abroad," Badulescu said.He declined to provide financial details saying this information is considered commercially sensitive.Badulescu said the global economic and financial crisis has not affected the company as hard as initially expected.At the beginning of 2009 the company was expecting a significant impact from the crisis but we have discovered that migrant workers are more flexible and resistant to the crisis than expected."Some 80% of Western Union's revenue comes from cash transfers from person to person, mainly from migrant workers to their families. When the crisis struck, the average amount of money transferred in a transaction decreased by between eight to ten percent but the number of transfers surprisingly rose, Badulescu said.Let's consider a Bulgarian citizen working in Spain in the construction sector, for example. If he loses his job, instead of coming back home, he is flexible and finds work somewhere else, maybe driving a taxi or in a restaurant. He will accept a job that is less paid or below his qualification, and will continue to send money home, albeit less than before. A Spanish citizen might not be so flexible or willing to accept a job below his qualifications."The explanation behind the slight increase in the number of transfers is the fact that the risky international environment has prompted people to be more selective in terms of who they trust with their money. More people started using Western Union's services instead of informal channels during the crisis.The company reported an 8.0% growth in transactions and a 3.0% growth in revenue in the first quarter of 2010, globally. For the whole year it has projected revenue growth of between minus one percent and plus one percent, Badulescu said, adding that the Romanian and Bulgarian markets are expected to follow the same trends.Western Union's cash transfers to Romania and Bulgaria are coming mainly from Spain, Italy and Greece due to the high number of migrant workers from the two countries there, but also from other European Union member states like the UK, Germany and France. The accession of Romania and Bulgaria to the EU in 2007 made it easier for their citizens to find a job elsewhere in the bloc.Cash transfers from Italy go mainly to Romania and those from Greece - mainly to Bulgaria. Sgnificant volumes are transferred to Bulgaria from Turkey, Badulescu added.Consumers from some 170 countries send cash via Western Union to Romania and Bulgaria, while clients from the two states send money abroad to around 130 countries. Western Union operates through partnerships with local agents - banks, postal offices and retailers.The group posted a consolidated net income of $849 million (696 million euro) last year, down from $919 million in 2008. Consolidated revenues fell to $5.08 billion from $5.28 billion in 2008.
Ryanair to fly to Plovdiv
No-frills airline Ryaniair will launch flights to Bulgaria but will initially land just in the second city of Plovdiv, said Ivo Marinov, deputy minister of economy, energy and tourism. Ivelina Grozdeva of the Bulgarian Hotel and Restaurant Association urged that the carrier should be allowed to also operate flights to Sofia, Bourgas and Varna. The government plans to lower landing fees for Plovdiv Airport for a period of two years to meet a requirement by the Irish company, which is looking for low fees, according to Marinov.
DB Schenker becomes Bulgaria's 9th railway freight carrier
German-owned company DB Schenker Rail EOOD has become the ninth railway freight operator in Bulgaria.The railway freight operator license is being presented to the company Thursday afternoon by Bulgaria’s Deputy Transport Minister Kamen Kichev at a special ceremony in the town of Pirdop. In addition to the license, DB Schenker Rail Bulgaria EOOD is receiving from the Transport Industry a safety certification, an insurance certificate, and a contract for access to the railway infrastructure with Bulgaria’s “National Company Railway Infrastructure.”DB Schenker Rail Bulgaria EOOD is owned by the German company DB Mobility Logistics AG, part of the Deutsche Bahn Group.Bulgaria’s Transport Ministry has announced a total of nine state and private companies have been granted licenses for railway freight carriers. These include four subsidiaries of Bulgaria’s state railway company BDZ as well as five private firms – Bulgarian Railway Company AD, Bulmarket DM OOD, Gastrade AD, Unitranscom AD, and DB Schenker Rail Bulgaria EOOD.
THE CRISIS:
Guarding the guardians
Source: The Economist print edition
Be careful what you wish for: you may get it. Last year Bulgarians voted to make Boyko Borisov, a burly former police chief, their prime minister. He had promised to spare nobody and nothing in tackling organised crime. He has certainly made a difference. The television news now features police operations with such flashy labels as “Octopus”, arresting people with such ominous names as “the Tractor”. The culture of impunity that once plagued Bulgaria has largely gone.A former prime minister, Sergei Stanishev, is under two investigations involving the loss of secret documents. Some of his former colleagues face questions about corruption, negligence and abuse of power. one prominent casualty is Nicolay Tsonev, a former defence minister, who was arrested in April in a hospital. As he was being handcuffed, a prosecutor screamed insults at him. All those charged deny wrongdoing, and none of their cases has come to trial.The new style is certainly going down well with ordinary Bulgarians. The hardline interior minister, Tsvetan Tsvetanov, has now replaced Mr Borisov as the country’s most popular politician. But some fear that the price of the crackdown may be bad government of a different kind: a still weaker rule of law, and even a shift towards what might look like a police state.Law-enforcement agencies now screen anybody who runs for high public office. That ought to help reserve power for the clean-handed. But in practice it could give spooks and security-service apparatchiks free rein. The crackdown has also brought paralysis in public administration. “Before, the administration did nothing without a bribe. Now they simply do nothing,” says Ivan Krastev, director of the Centre for Liberal Strategies, a think-tank in Sofia. This is slowing, among other things, the already deplorably tardy spending of European Union money.The biggest challenge is to guard the guardians by creating a sturdy legal framework for the anti-corruption campaign. Past efforts to reform Bulgaria’s creaky justice system have been largely fruitless. EU watchdogs that once barked warnings seem now to have given up. High-profile arrests are one thing: actually convicting a wrongdoer in a timely and transparent fashion quite another. The courts still move painfully slowly. When they are blamed for this, the judges respond that police evidence-gathering is sloppy. But when it transpired that a well-connected lobbyist had been able, in effect, to appoint senior judges, few of those named had to resign and no investigation ensued.Moreover, little of this gets the public scrutiny it deserves. Most big media outlets have murky ownership, leaving their journalists vulnerable to outside pressure and influence-peddling. The television news may look like the trailer for a gangster movie. But justice and showbiz are different.
Bulgarian, Romanian finance ministers to discuss EU funds
The finance ministers of Bulgaria and Romania will meet in Rousse in a month or so to discuss the preparation this autumn of the next framework period of EU funds, Finance Minister Simeon Djankov said.The sides will discuss ways to jointly use EU funding and especially ways to join the Danube Strategy.Smuggling will also be high on the agenda. Djankov said he believed that since there is no customs control at the Romanian border, large amounts of contraband cigarettes are smuggled into Bulgaria from Ukraine, Moldova and China.Romania is also having difficulties due to the smuggling of vegetables and meat from Greek ports through Bulgaria, he said.Djankov said he assumed that the fees payable for crossing the bridge over the Danube would be discussed at the September meeting of the two countries' Presidents. Djankov discussed the matter with his Romanian counterpart in Bucharest on May 26.Foreign investments in Bulgaria's border regions with Greece and Romania are expected to grow, Djankov told students and professors at Rousse University.He argued that the investment climate was deteriorating in these two neighbours of Bulgaria due to large foreign loans and budget deficits and the resulting rise in taxes or high tax rates in the next five years.Djankov's talk was entitled "Bulgaria: Whither after the Crisis?". He listed five sectors which are expected to boom after the crisis, saying that education and job training should lead the way there. The five sectors are agriculture, the textile and fashion industry, construction of infrastructure and a market for non-bank financiers specializing in investment funds, health insurance funds, the stock exchange and pension funds, to mention only a few.