The fifth forum on the topic “Construction in 2016 – Prospects and Challenges. Opportunities in the 2014 – 2020 programming period” brought together representatives of the government and businesses who discussed the development of the sector and priority projects that will be implemented next year. The event organized by the Bulgarian Construction Chamber (BCC) in partnership with “Stroitel” newspaper was held in the capital in “Sofia Hotel Balkan”.
“The discussion forum has become traditional. It is held for the fifth consecutive year and has found its place and became the most important event for the industry. At the conference openly and in dialogue the responsible for the sector institutions and builders put and discuss in professional language important issues, legislation, priorities, challenges and problems faced by companies in the sector and seek mutually beneficial solutions,” said the host of the forum – Chairman of the Board of BCC Eng. Svetoslav Glosov in his address to the guests. Among them was Deputy Prime Minister for EU Funds and Economic Policies Tomislav Donchev, Minister of Regional Development and Public Works Lilyana Pavlova, Minister of Environment and Water Ivelina Vasileva and Minister of Transport, Information Technology and Communications Ivaylo Moskovski. Special guest at the event was the Chair of the Committee on Regional Development of the European Parliament Iskra Mihailova.
Sofia Mayor Yordanka Fandakova told about projects that will be completed this year and will be implemented next year in Sofia. The major road projects and challenges to their implementation presented in the second panel the Chairman of the Board of Road Infrastructure Agency (RIA) Eng. Lazar Lazarov, Executive Director of Metropoliten EAD Eng. Stoyan Bratoev and Executive Director of the National Company “Strategic Infrastructure Projects” (NCSIP) Eng. Asen Antov.
The Secretary General of the Public Procurement Agency Ivo Katsarov explained the rules in the new Public Procurement Act, and Malina Krumova – Director of Systems for EU Funds Management Directorate at the Council of Ministers presented the EUMIS 2020.
The Chamber Chairman Eng. Glosov, who was also moderator of the first panel of the forum, continued his address to the guests giving data about construction companies in the country. The number of registered companies in the Central Professional Register of Builders (CPRB) is 4,830. Of these, 4,785 are Bulgarian entities, 45 are foreign companies. Most companies are small – 83.6%, the share of medium-sized is 11.8%, and the large ones are 1.9%, said Eng. Glosov. He reminded that according to the National Statistical Institute (NSI) the construction sector accounts for 4.7% of the Gross Value Added (GVA) and is leading sector in the economy, which ensures progress and new jobs.
“In 2014, companies of the sector in Bulgaria laid the foundations to go out of the crisis, according to the statistics,” said Eng. Glosov and added that BCC – the organization representing and protecting the interests of the sector, has focused its efforts in a few key directions, as the ultimate goal is to improve business environment, reduce administrative burden for companies, provide competitive and transparent conditions for public procurement, standardization of tender documents. He explained that to achieve these priorities the Chamber works in a constructive dialogue with representatives of the executive, legislative and local authorities.
“BCC expressed opinion on the proposed by the Council of Ministers to Parliament new PPA. We approve the bill and we hope it will be supported by the MPs in the form in which it is presented without making amendments to change the essential provisions in it. We expect PPA to regulate one of the key issues for sector “Construction” – the status of subcontractors,” said the Chairman of the Board of BCC adding that for the industry is extremely important also the ordinance for tenders in the sector. “The Chamber has the potential to prepare the draft of the regulatory document. An expert group headed by Deputy Chairman of BCC Andrey Tsekov works on it,” explained Eng. Glosov.
He pointed out that standard contracts are also among priorities of the Chamber. “The Managing Board ruled that it recommends to companies listed in CPRB and to public contractors as a national standard for negotiating public orders for construction and engineering to apply the general contractual terms of FIDIC. The Chamber is committed to develop and propose texts related to special terms in them, to avoid the mistakes made in other countries in the implementation of this type of contracts,” said Eng. Glosov.
In his words, as a major challenge for construction companies requiring urgent solutions is outlined the increasingly shortage of qualified staff. In this connection he underlined that the Chamber has created its own company which is working on the preparation of specialists. “We count on the amendments in the Vocational Education and Training Act to enable public-private partnerships for the creation of specialized colleges, centers for professional training of cadres and other forms of training of specialists for the sector,” added Chairman of the Board of BCC.
“I will conclude with optimism, albeit moderate, not only based on the trends of the national statistics. We are at the beginning of the new programming period. Over the past programming period we made mistakes but we gained invaluable experience. With the implementation of major projects – the metro, motorways, purification plants, landfills, beautiful and modern buildings, Bulgarian construction companies have shown that they can cope even with the most complex and challenging projects.
We know, we can and we want to build,” said Eng. Glosov.
He was definite that the industry is united and has clear priorities, and the Chamber gives voice to its positions. “BCC is an authoritative, reliable and wanted partner of Bulgarian and European institutions and international organizations representing the sector. The presence of ministers and guests to our forum proves it. This is the path to success we in the Chamber see – with the combined efforts of the state, professional organizations, businesses to build the modern infrastructure of our country for it to become an even more attractive place to live and invest,” said Chairman Eng. Glosov.
After the host of the event greeted the guests, discussions opened Deputy Prime Minister for EU Funds and Economic Policies Tomislav Donchev. “BCC Chairman said: “We are ready and we can build.” I know that. The comforting news is that in a horizon of 5 to 7 years on the market figuratively speaking will come out not less than BGN 20 billion. But let us think about the export potential of the Bulgarian construction business. I would like to see more native companies implementing large-scale projects also abroad and I think they have a chance for that,” he said in his speech. “Last I will add that our cooperation with the Chamber is not good. It is a benchmark,” Deputy PM said.
Minister of Regional Development and Public Works Lilyana Pavlova noted that more than half of the mentioned by Donchev BGN 20 billion will be provided by the department headed by her. “This is realistic and achievable. By 2022 the construction industry in the country can count on BGN 12 billion under programs and instruments managed by MRDPW,” said Pavlova.
Minister of Environment and Water Ivelina Vasileva reported the absorption of funds under OP “Environment 2007 – 2013” and gave information about the projects that will be funded in the new programming period. She said that for the past seven years and for the next until 2020 the resource of OPE is BGN 3.5 billion. “The money will not be enough to meet the needs, because only in the water sector for example are required nearly BGN 12 billion,” she said.
The minister explained that under axis “Water” from “OPE 2014 – 2020” with BGN 700 million will be funded the so called early projects. Among these are the four municipalities Plovdiv, Asenovgrad, Dobrich and Pleven in partnership with Dolna Mitropolia, and five more that will be approved after talks with JASPERS. Ivelina Vasileva added that through negotiations with EC the Bulgarian country has negotiated the transfer of the implementation of certain risk sites of the 2007 – 2013 programming period into the new one. They will also be funded under axis “Water” – with BGN 233 million, which are part of a total BGN 700 million for early projects.
The minister also announced that in sector “Waste” is opened a procedure aimed at municipalities. The funds for it are BGN 97 million to be invested in waste treatment and in the construction of composting plants. Vasileva made a proposal to the Chamber to be held a round table of experts from MEW and from the construction industry to discuss
best practices for timely implementation of projects in the water sector.
Operational Program “Transport and Transport Infrastructure 2014 – 2020” was presented by the Minister of Transport, Information Technology and Communications Ivaylo Moskovski. He pointed out that 673 million euros of the funds are provided for development of railway infrastructure. Of these, nearly 320 million euros will be invested in the completion of the modernization of the line Plovdiv – Burgas. In the new programming period we will be working also on the section Elin Pelin – Septemvri, added Moskovski.
Special guest at the event was Iskra Mihailova, Chair of the Committee on Regional Development of the European Parliament. She invited BCC in 2016
to make a presentation of the Chamber in EP,
and the best projects implemented by Bulgarian builders. “In this way your work will be displayed and I am proud of it and thank you for everything you have built. Jointly we will overcome the difficulties,” said Iskra Mihailova.
In the second panel of the forum moderated by Eng. Nikolay Stankov – Deputy Chairman of BCC, were discussed the major road projects and the challenges and prospects in the new programming period. It began with a presentation by the Chairman of the Board of Road Infrastructure Agency Eng. Lazar Lazarov. From the given data it became clear that the main financial resource of OPTTI will be directed towards completion of the Struma Motorway. “Its construction is a priority for the state. If we can save funds, they will be invested in the construction of the tunnel under Shipka peak and the adjacent infrastructure to it,” said Eng. Lazarov. He also said that at the meeting of transport ministers from the region, held in Zlatni Piasatsi, was discussed the possibility
over the Danube River at Ruse to be built a second bridge
parallel to the first one, to take on the heavy traffic. “Our next efforts should be focused on this direction. For this purpose it is necessary to think about the construction of the section from Veliko Tarnovo to Ruse. The conceptual design was assigned. We expect then to proceed with the actual construction. It is likely the route in this section to be implemented in several stages,” added the Chairman of RIA.
The Executive Director of Metropoliten EAD Eng. Stoyan Bratoev made a presentation for the development of one of the largest infrastructure projects in the country – the metropolitan subway. He pointed out that the total length of the lines of the three stages of the subway, built during the 2007 – 2013 programming period, is 21 km, along which there are 20 stations. “The amount of investment is 642 million euros, i.e. 30.5 million euros per kilometer. This includes also the price of the trains,” added Eng. Stoyan Bratoev. He underlined that the construction of the extension of the second ray to Srebarna Street should be ready in August 2016.
“We start construction of the third metro diameter this year and it should complete in 2019. It passes through a difficult terrain with several rivers and large collectors. The most complex for implementation will be the station at Eagles’ Bridge. The second stage has a length of 4 km and 4 stations. Construction is planned to start in the period 2016 – 2019. The funds for both phases are provided by “OPTTI 2014 – 2020”. EU funding is 401 million euros and the national one – 92 million euros,” explained Eng. Bratoev.
Eng. Asen Antov, Executive Director of NCSIP, responsible for the major road projects in our country, made a presentation on the motorways Struma, Hemus and Cherno more.
Regarding the first one, he described as the greatest challenge to builders the implementation of Lot 3.2. Eng. Antov said that the remaining for construction more
250 km of the route of the Hemus Motorway will be divided into 8 stages.
He reminded that for the Cherno more Motorway is not secured financing with public funds. “In 2013 we updated the feasibility studies to explore the possibility the site to be supported by public-private partnership. Interest for this is expressed repeatedly by international companies but currently stronger actions on their part are not taken,” added Eng. Asen Antov.
Sofia Mayor Yordanka Fandakova closed the panel telling about the priorities of Sofia in 2016. She said that efforts will be directed mostly to the renovation of inner streets and restoration of sidewalks and street lighting. The implementation of the program for reconstruction of the main boulevards will be completed. “I appeal again to realize quality projects so that all investments we make to enjoy Sofia citizens and guests of the city,” she stressed. Yordanka Fandakova expressed gratitude to BCC and “Stroitel” newspaper for the fruitful partnership with Sofia Municipality.
Moderator of the third panel of the forum was Deputy Chairman of BCC Andrey Tsekov. Discussions focused on changes in the legislation and expectations of the industry, the new PPA and the electronic application and reporting in EUMIS 2020.
Ivo Katsarov, Chief Secretary of the Public Procurement Agency, defined the draft of the normative act on public procurement as
law of opportunities.
In his words, key in it is the full compliance with European directives texts, such as national interpretations are minimized. “It has a strong focus on electronization. Administrative burden in tenders is reduced. Key role for this has the European single procurement document. It will replace the previously submitted papers – for financial and economic standing, technical capabilities and qualifications,” explained Katsarov.
Eleonora Nikolova, Acting Director of the Center for Prevention and Countering Corruption and Organized Crime (CPCCOC), said that the institution headed by her found positives in the new PPA. She expressed admiration also for the better regulation and the choice of external experts.
In a summary of the theme for the new programming period Malina Krumova, Director of Systems for EU Funds Management Directorate at the Council of Ministers, presented EUMIS 2020. She noted that the first important thing for the modernized system is the introduced electronic application with a standardized form. “Standardization allows a larger volume of structured information, which can then be processed, give automated reports, serve for analyses,” said Krumova.