BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 9 – 16 JULY 2010 )
Sections/headline briefs:
MACROECONOMY:
· Bulgarian-Austrian business forum opens in Sofia
· Bulgaria faces EU anger over wind energy restrictions
· Belene nuclear plant high on Tadic agenda in Bulgaria
· Macedonia said to eye participation in Bulgaria's nuclear project
· U.S. Group Chevron applies for shale gas exploration licence in Bulgaria
· Bulgaria's Trade Deficit Down by 40% in January-May 2010
INVESTMENTS:
· Radomir metal industries to build EUR 120 M solar park
· Sofia to invest EUR 1 B in road construction
· GDF Suez mulls EUR 5 M investment in biomass plant in Bulgaria
COMPANIES:
· Germany's Bauhaus to step in Bulgaria
· Bulgarian smelter OTZK to launch new lead facility 2 years after getting all permits
- Bulgaria's competition watchdog oks merger of cigarette distributors
· Bulgarian mattresses producer TED-BED sets out to conquer EU market
THE CRISIS:
· New car sales decline slows down to 39.4% y/y in H1
· Rail transportation of automobiles in Bulgaria stumbles
· Bulgarian industrial output down in May
MACROECONOMY:
Bulgarian-Austrian business forum opens in Sofia
Bulgarian Economy, Energy and Tourism Minister Traicho Traikov and Minister in charge of EU Funds Management Tomislav Donchev opened a Bulgarian-Austrian Business Forum here on Monday.The meeting is organized by the Bulgarian-Austrian Management Forum, which named the two ministers "goodwill ambassadors for the promotion of bilateral business relations".Donchev said that the Common Market logic presupposes that competitiveness and efficiency outweigh the nationality of a company. "Austria and Bulgaria have excellent political relations. Moreover, Austria tops the list of home countries of foreign investments in Bulgaria," the Minister said. He recalled that Bulgaria has yet to contract 10,000 million leva from the EU funds, which is a good business opportunity for Bulgarian and Austrian companies. The EU Danube Strategy, which involves both Bulgaria and Austria, also opens up fine prospects for economic development of the region, Donchev added.Traikov stressed in his statement that the future of Bulgaria's economic development passes through development of innovation-dependent sectors. During the forum, Donchev will take part in a business forum organized under the patronage of Austria's Ambassador in Sofia Gerhard Reiweger, at which the European Strategy for the Danube Region will be discussed.Taking part in the business forum are local authorities officials, representatives of branch organizations and of the commercial sections of foreign missions in Bulgaria, and Bulgarian and Austrian company executives.
Bulgaria faces EU anger over wind energy restrictions
The European Commission may launch an infringement procedure over limitations on projects for producing energy from wind-energy sources, the Bulgarian wind-energyassociation has warned. Last week the Parliament adopted on first reading the amendment to the Bulgarian farmland protection policy act, which envisions a ban of wind-energy projects on 28% of the Bulgarian territory. There have been serious objections with various arguments against the amendment.According to the association, the experience of other EU member states shows that wind-energy projects do not endanger agriculture but rather create job positions and with the implementation of the envisioned limitations, these job positions will be lost, a well as the rent revenues from fields and investments.“The amendment is good only for the big industrialized mass producers, but it will harm the revenues of small agriculture producers and the local land owners. It also endangers the existing job positions in the agriculture, as well as the future job positions at the sphere of renewable energy,” people from the association said.They also stated that the amendment isolates the renewable energy, although, in their words, other kinds of construction, like villages, roads, gas stations and others, as well as the change in the purpose of fields for them, would have a similar effect on the agriculture lands.According to statistics of the association, only 0,017% of the lands are affected by renewable energy, while there are much more unused lands at the moment.“The amendment imposes a risk of losses for Bulgaria for hundreds of millions every year,” people from the association said, adding that for every percent energy from renewable sources that is below the Bulgarian goals within the EU, from 2011 the country might have to pay EUR 200-300 M, in order to buy quotas for covering the insufficiencies.“The amendment is unreasonable. It exposes the state budget at a huge risk, in order to protect the interests of a few mass producers,” the association said.The Bulgarian wind-energy association includes 20 leading companies for wind energy in Bulgaria and Europe. Among its creators are the turbine producers “Vestas”, “Enercon”, “Geo Power”, which created the biggest wind park in Bulgaria in cooperation with the US “AES”, and “Enertrag”, which is one of the biggest wind energy producers in the world.
Belene nuclear plant high on Tadic agenda in Bulgaria
Serbian President Boris Tadic is expected to discuss the country's participation in Bulgaria's second nuclear power plant of Belene during his upcoming visit to Sofia on Friday.Tadic is scheduled to confer with Bulgarian Prime Minister Boyko Borisov and Belene will be a major topic on the agenda of the meeting.Bulgaria's Economy and Energy Ministry is not ready yet to approach the Serbian side with a final offer and last-minute revisions are highly likely, local media reports say.Talking about Tadic visit to Bulgaria at the end of last week, Bulgaria's Prime Minister Boyko Borisov expressed hopes that the Serbian president will give an affirmative answer toBelene offer and the country will acquire a minority stake in the nuclear plant.“This is how we can guarantee our electricity sales to the Serbian market. This is how the future of the project can become clearer,” Borisov told the Bulgarian National TV channel.About two months ago Serbia's energy minister confirmed reports that the country is considering participation in Bulgaria's second nuclear power plant, which has stalled over lack of funding."The Bulgarian prime minister officially made an offer for Serbia to participate in financing construction of the Belene plant," Energy Minister Petar Skundric told an energy conference on May 19. "We haven't made the decision yet, but we are interested."In his words the project would show that the country, which has an embargo on nuclear power plants until 2015 put in place following the Chernobyl disaster, is able to hadle such projects.“It would be a good reference for us and allow us to respect the embargo," Skundric said. "It would also contribute to regional stability and cooperation."The view is shared by the majority of politicians and scientists in Belgrade, who saySerbia's involvement in Belene will secure electricity supply for decades ahead from a country, which is a member of the European Union.The government has also reportedly unsuccessfully courted Romania as it angles for a new chief investor in its second nuclear power plant Belene to replace the German energy company RWE, which withdrew last autumn.Bulgaria suspended the construction of its second nuclear power plant until it finds a new investor and funds to complete the project at Belene, on the Danube, 180 kilometres northeast of the capital Sofia.
Macedonia said to eye participation in Bulgaria's nuclear project
Macedonia is considering the acquisition of a minority stake in Bulgaria's second nuclear power plant of Belene, which has stalled over lack of funding, according to media reports.Should Macedonia join officially the project, this may secure financing for the construction works and a market for the electricity to be produced by the plant, local Standard daily reported, citing unnamed members of the Bulgarian parliament. Earlier this year Bulgaria's Prime Minister Boyko Borisov said Serbia has expressed interest in a 5% stake in the project, which in his words would turn it into "a Balkan, European project."The government has also reportedly unsuccessfully courted Romania as it angles for a new chief investor in its second nuclear power plant Belene to replace the German energy company RWE, which withdrew last autumn.Bulgaria suspended the construction of its second nuclear power plant until it finds a new investor and funds to complete the project at Belene, on the Danube, 180 kilometres northeast of the capital Sofia.The plant was originally to be built by Russian company Atomstroyexport for EUR 4 B. The first reactor is expected to be built by mid-September for delivery to the site. Bulgaria has to pay an installment of EUR 280 M in addition to EUR 300 M already paid.Last month Bulgaria's Prime Minister Boyko Borisov unexpectedly said that his country was “giving up” on Burgas-Alexandroupolis oil pipeline project decision, and that construction on the planned Belene nuclear power plant had been suspended. In a dramatic twist that left all of Europe confused, Borisov retracted his statements shortly afterwards, saying that the Bulgarian government hasn’t made a final decision regarding the construction of the Burgas-Alexandroupolis oil pipeline and Belene nuclear power plant.
U.S. Group Chevron applies for shale gas exploration licence in Bulgaria
U.S. group Chevron Corp has applied for a licence to drill for shale gas in northeastern Bulgaria, Sofia-based media reported on Tuesday."So far we have set our eyes on a site in northeastern Bulgaria, on the border with Romania. The study [of this site] will take five years," business daily Dnevnik (www.dnevnik.bg) reported, quoting Chevron vice president Ian MacDonald.The application is pending approval by the Environment Ministry and the cabinet.MacDonald is on a delegation of Chevron executives currently in Bulgaria to meet with the country's Prime Minister Boyko Borisov and discuss with him local opportunities for shale gas exploration.The news daily also quoted U.S. ambassador in Sofia James Worlick as saying that Bulgaria has the potential to extract some 25 billion cubic metres shale gas if such deposits are discovered.Shale rocks are rich in fossil fuels but are generally seen as expensive to extract gas from.In U.S. alone, shale gas output has doubled in the last ten years.
Bulgaria's Trade Deficit Down by 40% in January-May 2010
The gap between Bulgaria’s import and export is closing as the country’s trade deficit is down by 39.7% in the first five months of 2010 year-on-year.According to data of the National Statistical Institute, Bulgaria’s total exports in January-May 2010 amounted to BGN 10.554 B, which is a 22.1% year-on-year growth.At the same time, the imports amounted to BGN 12.969 B, which is an increase of only 2.5% compared to the first five months of 2009.Thus, in January-May 2010, Bulgaria’s trade deficit amounted to BGN 2.415 B, 39.7% decline y/y.Only in May, Bulgaria exported goods and services for BGN 2.37 B, a 33.8% increase compared to the same month of 2009. At the same time, its May imports amounted to BGN 2.95 B, a growth of 12.5% y/y. Both Bulgaria’s export and import are accelerating their growth in April and May 2010. The NSI data indicates that exports of Bulgarian companies are on the rise for a seventh consecutive month. It confirms forecasts that export-oriented sectors will help the Bulgarian economy recover from the crisis and generate a minor growth of employment thanks the rise of foreign demand for Bulgarian-made products and services.Yet, Bulgaria’s export in the first 5 months of 2010 is still 15% smaller than the volume ofexport realized in the same period of 2008, before the global crisis kicked in.Bulgarian economists and analysts have attributed the rising exports to foreign demand, some restructuring made by export-oriented local companies, and faster recovery in non-euro zone countries.Even though the Bulgarian foreign trade gap is expected to continue closing, it is still believed that the country’s exports will not be able to catch up with the imports by the end of 2010. NSI data has indicated that Bulgarian companies are increasingly oriented towardsexporting to non-EU states, as the share of Bulgaria’s trade with countries outside the EU rose to 40% up from 30% at the beginning of 2010.
INVESTMENTS:
Radomir metal industries to build EUR 120 M solar park
Bulgarian metallurgical company Radomir Metal Industries plans to construct a EUR 120 million photovoltaic park, the company's supervisory board chairman Plamen Bonev told state news agency BTA today. The solar panels will be located on an area of 140 ha as well as on the roofs of the company's production facilities. The financing will be secured through credits from German banks and will have to be repaid in 15 years. The first stage of construction works will start in 2010. Radomir Metal Industries has the necessary infrastructure as well as a substation on the territory of the plant, which would be a significant advantage, said Bonev.
Sofia to invest EUR 1 B in road construction
Sofia's government has requested one billion euro financing from the World Bank to construct roads and implement infrastructure projects in the country. 'World Bank Group President Robert B. Zoellick is scheduled to visit Sofia on August 8 to sign the agreement for the loan,? PM Boyko Borissov told the Standart yesterday. He discussed Bulgaria?s stance in the agreement with Finance Minister Simeon Djankov, European Affairs Minister Tomislav Donchev, Transport Minister Alexander Tsvetkov and Regional Development Minister Rosen Plevneliev.PM Borissov also wants to negotiate another EU financing agreement for the upgrade of Bulgaria?s electricity transmission system.
GDF Suez mulls EUR 5 M investment in biomass plant in Bulgaria
French energy company GDF Suez is considering investing EUR 5 M in a biomass plant in the Bulgarian mountain resort of Bansko.The news has been announced by the Bansko Municipality after town mayor Alexander Kravarov met with representatives of GDF Suez.The manager of the local private company Bul Eco Energy Ltd, Krasimir Vluchkov, was also present at the meeting. Bul Eco Energy has created and runs the local biomass thermal power plant in Bansko, which burns wood to provide heating and hot water to the town and a number of its hotels.By the end of July GDF Suez, which focuses on energy efficiency and renewable sources, is going to present to the Bansko Municipality its investment offer.The Bansko Municipality has pointed out that the French company has set up biomassheating installations in 150 cities and towns around Europe.
COMPANIES:
Germany's Bauhaus to step in Bulgaria
Germany's DIY retail chain Bauhaus is in the final stages of signing a contract for the land where it will build its first hypermarket in Sofia, said Veselin Rusev, a representative of consulting company BG Malls. The store is expected to be part of Sredets retail park in Sofia's Nadezhda district, confirmed a representative of investors in the park. It will spread on an area of 20,000 square meters and will offer a wide range of furniture. The contract is scheduled to be signed by the middle of this month. Bauhaus has been examining the Bulgarian market for four years and they seem to have finally decided to become a player on it and rival the other DIY retail chains present here, including Baumax, Praktiker and Mr. Bricolage. The company is said to plan the opening of at least two or three stores in the capital Sofia, which will be followed by an expansion in the other bigger cities.
Bulgarian smelter OTZK to launch new lead facility 2 years after getting all permits
Bulgarian lead and zinc smelter OTZK hopes to launch production at a new 45 million euro ($56.6 million) lead smelting unit within 24 months after completing all the formalities, the company said after receiving the environmental go ahead for the project.OTZK obtained on Friday a permit from the Environment Ministry for the construction of a new lead smelting unit in Kardjali, in southern Bulgaria, which will enable the company to increase its lead output to 60,000 tonnes per year, the company said in a statement.Currently, OTZK has an installed capacity for the production of 33,000 tonnes of lead per year.A series of routine activities lies ahead (designing, lisensing, receiving permits) and we believe that 24 months after completing them we will be able to start production at the new unit," OTZK said.The new unit will employ the lead production technology developed by Austraila's Ausmelt that is more environment-friendly in comparison with the technologic solutions currently in use in Bulgaria, the company said.The company also said it is working on another major investment, a 85 million euro zinc plant, which will increase its zinc output to 45,000 tonnes per year from 27,500 tonnes. The new zinc unit is expected to become operational by the end of next year.The smelter's zinc and lead output will be cut by 3,000 tonnes each to 18,500 and 18,000 tonnes, respectively, this year due to maintenance halts that took place in the spring.OTZK is part of local Intertrust Holding group, set up in 2005. The holding group has 21 subsidiaries in four countries.OTZK's sole competitor in Bulgaria is the Plovdiv-based KCM, which is the country's largest zinc and lead producer.Shares of OTZK, part of the blue-chip SOFIX index on the bourse in Sofia, edged up 0.48% to 10.8 levs in a volume of 177 stocks on Monday.
Bulgaria's competition watchdog oks merger of cigarette distributors
The Bulgarian Competition Protection Commission (CPC) has permitted three bigcigarettes distributors to unite in one company. From now on, “Tabac Trading Partner” Ltd., “Delivery” and “Bulgarian Vending Company” will be known as “Tabac Logistic Group” Jsc. The Bulgarian anti-monopoly institution assigned Tuesday immediate execution of the decision, because according to its research, the deal will not have any negative consequences on the market.“Tabac Logistic Group” will buy, deliver, transport and store tobacco products, made by “Bulgartabac Holding”. CPC noted that in order to make the decision, they have done a research among producers, distributors and bigger retailers of cigarettes and have not received a negative statement for the deal. The commission's research has also shown that there was a good interchangeability between the Bulgarian and imported cigarette brands.“The commission is treating the geographical market for cigarette distribution as national. The analysis has established that the market for cigarette distribution is very competitive and there are many companies that are willing to execute distribution of the production of the big producers and importers to the final customers, which are the wholesalers and retailers,” the CPC decision said. “Delivery” owns stakes in six holdings for selling cigarettes, which are based in the Bulgarian cities of Blagoevgrasd, Razgrad, Ruse, Veliko Tarnovo, Karlovo and Hissar.
Bulgarian mattresses producer TED-BED sets out to conquer EU market
Bulgarian manufacturer of mattresses TED-BED Jsc is aspiring to become a leader on the European market in the medium run, its management has announced.“We will be working to become one of the top 3-4 producers and recognizable brands ofmattresses on the European market. Our ambition is to accomplish this goal with 7-10 years,” the CEO and owner of the TED-BED company Elin Todorov has stated at a news conference following a tour for journalists of the company’s factory near the southern Bulgarian city of Plovdiv.TED-BED Jsc invested about EUR 11 M in its manufacturing plant near Plovdiv, which was opened in 2009, and is located on an area of 24 000 square meters.The TED factory currently produces about 1 500 mattresses daily but has the capacity to increase its output 3-4 times. The company currently employs about 250 workers. The size and capacity of the plant rank it among the top three mattresses factories in Europe.TED-BED Jsc at present has a share of about 58% of the Bulgarian market of mattressesbut has clearly embarked upon an ambitious course of expanding its presence and sales abroad. Currently, only about 30% of its produce goes for exports.“We have accomplished a leading position at home, and we are now aspiring to do the same in Europe,” Todorov said outline what he says are notable successes achieved by his company abroad over the past year.The products of TED-BED Jsc are available in the UK, Germany, France, Spain, Switzerland, Lithuania, Latvia, Estonia, Finland, Greece, Morocco, Macedonia, Croatia, Denmark, Ukraine, Serbia, Italy, Romania, Ireland, the Netherlands, Belgium, Serbia, Albania.The Bulgarian manufacturer entered seven new markets - Switzerland, France, Albania, Hungary, Denmark, Italy, and Croatia only in the first six months of 2010.“The most important thing for us is to expand our foreign markets and our products. We keep looking for new markets. Each week we get at least two visits by potential foreign partners, and we win contracts with about 90% of them,” explained the CEO of TED-BED Jsc.In 2009, the companies export turnover doubled compared to the previous year, and it hopes to achieve the same result in 2010.Participation in crucial international commercial expos has proven key for the successful promotion of the Bulgarian manufacturer abroad, says its management.Only in 2010 so far TED-BED presented two of its brands, TED Dream Places and Sensi Scandia, at four top international expos receiving praise by established international companies: the Heimtextil expo in Frankfurt, Germany, where its economy-class Solo Mattress proved a great success; the IMM expo in Colon, Germany; the iSaloni (Salone Internazionale del Mobile), the world’s most prestigious furniture expo in Milan, Italy, where TED became the first and only Bulgarian brand to ever be presented; and thefurniture expo in Stockholm, Sweden.
The brand portfolio of TED-BED Jsc, includes the TED Mattresses for the Bulgarian market, the TED Dream Places – mattresses exported around Europe; Sensi Scandia – highest-class sleeping systems; Linea Mattresses – economy-class mattresses; TED Sleeping Systems – mattress parts; TED Home Collection – bed linens. Its product series are Natura, Wellness, Scandinavian, British, Italian, Children’s, and limited editions such as the TED Rock Mattress.“We have welcomed the economic crisis. It is here to help us. Thanks to it, we are adapting our manufacturing much faster,” says the company CEO Elin Todorov.TED was started back in the very early 1990s as a family company whose name is an acronym of the names of its founders, the father named Todor, and his two sons Elin and Dimitar. The firm first focused on construction as all of the three founders are construction engineers.They only started to produce mattresses in the mid 1990s, and while their company has several additional manufacturing operations, it gradually put an emphasis on the production of mattresses and bedroom products.
THE CRISIS:
New car sales decline slows down to 39.4% y/y in H1
The number of new vehicles sold on the local market by members of the local car importer association fell by 39.4% y/y to 8,998 in H1. The decline narrowed from the 42.4% y/y drop in Jan-May. In June alone, the number of sold cars increased by 14% m/m to 1,833, which showed a revival of the domestic car sales market. Toyota kept the leading position with a market share of 10.4% in Jan-June, followed by Ford (9.9%) and Peugeot (9.2%). The car dealers sold 394 buses and trucks in Jan-June, down by 27%. Mercedes got the biggest market share with 35%, followed by Iveco (34%). The sales of motorcycles declined by 27% y/y to 191, almost 42% of which were Peugeot. June 2010 was the best-selling month for the car market in Bulgaria in the year so far, according to Association of Motor Vehicle Manufacturers data quoted by Dnevnik.The association’s figures said that 1910 units were sold in June. Between January and June, Bulgaria sold 8998 units of cars, lorries, buses and motorcycles, a total of 5854 less than in the first half of 2009.According to Avtounion marketing director Krassen Hadjiev, the higher sales in June confirmed what he described as the trend of recovery on the car market."The main drivers of growth were the high price discounts and customers’ easier access to leasing financing. I expect an increase in demand mostly by companies in the coming months," Hadjiev said.The car holding, which represents 11 car makes, reported 1,111 units sold for the six months of the year, capturing 13 per cent of the market, up from 10.5 per cent a year earlier. on a monthly basis, the group’s sales increased by 26.5 per cent as the market rose by just more than 11 per cent.Asen Vasilev, marketing director of Star Motors, the local representative of Mazda, said the coming months would offset the tepid sales so far and the market decline would decrease to about 20 per cent for the year.Separately, the European Commission said that its latest report on car prices shows that prices fell slightly, in real terms, in the EU in 2009 and also converged within the EU's single market.At the same time, prices for repair and maintenance services as well as spare parts continued to rise well above inflation, confirming the need for the stricter competition rules in place for the sector since June 1.The relatively stable car prices in 2009 owes much to the incentives to buy new cars put in place in many countries to mitigate the impact of the economic recession. Joaquín Almunia, Commission Vice President in charge of Competition Policy, said: "I am very happy that consumers in Europe are continuing to benefit from strong competition in the markets for car sales."At the same time, I am dismayed to see that the price for repairs and spare parts continued to rise during the economic recession. This shows that bringing more competition in the after-sales market was the right choice and should pave the way for more efficient services to the benefit of European consumers," Almunia said.The EU price index for cars (reflecting nominal prices paid by consumers, including rebates, VAT and registration taxes) increased by 1.1 per cent, against a 1.7 per cent rise in overall consumer prices, translating into a fall in real car prices of 0.6 per cent.Real car prices for consumers expressed in the respective currencies fell in 24 out of 27 EU member states in 2009.In the Netherlands they were stable whereas they increased in the UK (7.7 per cent) and Sweden (2.7 per cent).However, it should be recalled that car buyers in the latter two countries benefited from an extraordinary fall in prices (of 9.7 per cent and five per cent, respectively) in 2008, so overall they are still better off today compared to the beginning of 2008, the European Commission said.In the UK, the movement in prices also reflects the end of the temporary decrease in VAT, in January 2010.The fall in real prices was particularly marked in Slovenia (13.4 per cent), Lithuania (11.1 per cent), Slovakia (11 per cent) Romania (10.1 per cent), the Czech Republic (9.4 per cent), Malta (9.2 per cent) and Bulgaria (9.1 per cent).The fact that most new EU member states were harder hit by the recession than the EU as a whole in 2009 may have contributed to these price decreases, the European Commission said.Among the large markets, real prices decreased most notably in Spain (4.7 per cent), while Italy, Germany and France experienced more moderate price reductions (1.1 per cent, one per cent and 0.6 per cent, respectively)."Broadly, the fall of real car prices across the EU confirms once more the favourable long-term price trend for consumers, which arises from global production overcapacity and intense competition between car manufacturers," the European Commission said.Price differences between member states as expressed by manufacturers' price lists fell significantly in 2009, with the average standard deviation going down from 9.8 per cent to 8.5 per cent, with the exception of the euro zone, where it increased slightly from six per cent to 6.5 per cent.This is due mainly to the boost in demand for smaller cars generated by rather generous fleet renewal subsidies in certain countries, according to the European Commission.Overall, price differences for passenger cars remain moderate. By comparison the EU-wide dispersion indicator for a basket of 16 food products, ranging from butter to white bread, amounted to 34.4 per cent in 2008.By contrast, prices for repairs and maintenance as well as spare parts continued to rise well above inflation (1.5 per cent and 0.7 per cent, respectively in real terms).Introducing more competition in the after sales market is the main purpose of the new competition law framework for motor vehicles adopted in May and in force since last month, the European Commission said.The new rules removed the benefit of the block exemption for manufacturers whose market share of the repair and maintenance markets exceeds 30 per cent (most of them, at present) making it easier to deal with refusals to give technical information to independent garages or to misuse warranties.New car registrations picked up in the second half of 2009, largely due to the impact of car renewal schemes in a number of EU member states.In total, 14.4 million new cars were registered in 2009. This was not enough, however, to prevent a drop in sales.
Rail transportation of automobiles in Bulgaria stumbles
Last week Minister of Transport, Information Technologies and Communications, Alexander Tsvetkov, attended the turning of the first sod for the project to build a terminal for combined transport (ROLA) at Dragoman railway station. The project is funded with nearly six million Bulgarian levs by the National Railway Infrastructure Company and will be implemented by the Transport Construction and Rehabilitation state enterprise. The survey and design work have been prepared by Eurotransproject Ltd., and the deadline for the construction of the terminal is 90 days. It is envisaged to be located near a former facility at Dragoman station and will include three tracks. The goal is certainly good - trucks that travel from Europe to Turkey and the Middle East will thus not have to pass the roads of Bulgaria, and yet at the station of Dragoman may be loaded on trains. A parking lot will be built for the waiting lorries to avoid congestion. The road access to the terminal will be secured through a link to the existing international road to Kalotina and the terminal will be accessible through a long roundabout way. Cars will have access to the ramp for loading. The benefits are indeed significant - the option for railway transportation to the country's next frontier station at Svilengrad will reduce the burden on highways. What is more, the number of road accidents is forecast to drop more than five-fold. Analyses of the transport ministry show that if the country shifts to ROLA shipments, the pollution caused by automobile engines will be reduced nearly ten-fold. The question is which carrier will agree to board the train trucks. And unfortunately the answer is no one. "To do something like this, you must first have clear economic benefits. And for us they are uncertain. Who will be subsidizing these services once the country is in such severe financial situation, while the national railway carrier is in an even worse state? We have no agreement for ROLA shipments with Turkey, from where the most serious number of trucks comes, " said Krassimir Lalov, a member of the board of directors of the Confederation ofRoad Transport Unions told the Banker weekly. Another disturbing fact is that BDZ has no rail platforms on which to board the trucks. Such are to be rented or bought, which in any case will burden additionally the teetering railway company. According to experts, the most frequently used in Europe Alpine carriages are quite expensive, and every two years need major renovation. каре: The transfer of heavy trucks on special wagons and their transportation by rail is the most topical and frequently discussed combined transportation method that is being imposed by the European Union. According to a study of the Energy and Transport Directorate General of the European Commission, it has several significant advantages: it reduces the environmental pollution by 85-90 percent, depending on the distance, saves liquid fuels at a rate varying between 30 percent and 50 percent, reduces the number of road accidents by 500 percent, alleviates traffic on highways, requires lower costs of maintaining the country's road network, saves money for new construction, and decreases the costs of manpower as a larger quantity of goods are transported by less people. The preferred time for combined transport is at night, as trains run at a speed of 100-120 km/h and their stay at border points is no longer than 30 minutes
Bulgarian industrial output down in May
Bulgaria's industrial production marked a 0.4% increase year-on-year in May, the statistics office said Friday. Manufacturing output rose 2.4%, while the electricity, gas, steam and air conditioning supply production declined 4.7%, data showed. Production in the mining and quarrying industry went down by by 2.9%. Production of investment goods and energy shrank, while that of intermediate goods increased. Month-on-month, industrial output dropped 0.9% in May with production falling 14.3% in the electricity, gas, steam and air conditioning supply segment.