The situation for the municipalities and the construction sector is critical. The suspended payments under OP “Environment” (OPE) put most of the projects under risk of freezing; problems emerge in the remaining operational programs as well. The deadlock, in which the companies are placed, leads to increased social tension. For citizens, the suspension of projects, the excavated streets and the undeveloped water network are seriously undermining the quality of life. Under threat is the compliance with deadlines for implementation of projects set out in the contracts, which is a risk of 100% sanctions and return of hundreds of millions levs to EU. Fast rescue actions are needed to come out of the alarming situation. This position united the managements of NAMRB and BCC. The Chairman of the Chamber Eng. Svetoslav Glosov and the Deputy Chairman of NAMRB Dimitar Nikolov met in Burgas to discuss the opportunities for joint action to find a mechanism to solve the problems.
The decision to initiate the meeting was taken at the BCC Board that was held in Burgas. There the management of the organization asked the Chamber to come up with a clear position on the problems of EU funds and to organize a meeting with the National Association of Municipalities. It was attended also by Eng. Nikolay Nikolov, chairman of the BCC regional office in Burgas.
“The problem is very serious. Most affected are we and the municipalities. According to official data from the Ministry of Finance (MF), the obligations of local authorities to the builders are BGN 180 million. Currently BCC collects data from its members for the amounts they have to receive under various programs and according to our estimates they will exceed BGN 600 million,” said BCC Chairman Eng. Glosov.
According to Deputy Chairman of NAMRB and mayor of Burgas Dimitar Nikolov, there are already big companies that are technically bankrupt. Nearly 500 are the medium and small contracting companies to which payments are delayed, an avalanche of lawsuits follows, warned Nikolov. It is about a collapse in the industry, Deputy Chairman of the National Association summed up the situation. From the association was sent a letter to the Minister of Finance with proposals for state intervention out of the critical situation. According to NAMRB data, to FLAG fund there are claims from the municipalities for BGN 120 million, which are not considered because of the suspension of OPE. If the state provides this money under FLAG, the municipalities will be able to start at least partially to pay the providers of water projects and landfills. The Environmental Protection Fund should also provide funds. “Now local authorities are worried because they come in large arrears against builders, mayors of smaller municipalities directly advise companies to stop work. However, they have already constructed a large part of the sites for which they have not received payment, some activities are not calculated, so there are hidden works and generally I think that the obligations reach BGN 1 billion,” said Dimitar Nikolov. He added that the Ministry of Finance should also provide funds to lend municipalities interest-free as the blame for stopping the operational programs is not ours. If these measures are not taken, things will get out of control.” According to Nikolov, the National Assembly and the political forces in parliament can also help by voting redistribution of BGN 200 million from the budget to take the most necessary payments on green projects.
The mayor of Burgas commented the delay under OPRD and RDP explaining that advance payments were bigger there and the municipalities still make payments on the regional program. But by the end of August the money will run out and in September the implementation of these projects will also come up as a problem.
The legislation creates paradoxes as well, the lack of harmonization with the EU directives leads to “Catch 22” – although the Bulgarian court ruled in favor of a decision of a given municipality, there is no money because the programs are stopped by the European standards.
Finally, the representatives of BCC and NAMRB requested an urgent meeting with Prime Minister Plamen Oresharski and Minister of Finance Petar Chobanov on Monday, 14 July, to resolve the critical situation. In an open letter to the Prime Minister is stated that if the meeting does not happen and the state does not take adequate measures to ensure the necessary financial resources, the two organizations will hold a joint press conference, at which will be explained the reasons for the actions to follow taken by the industry.
At the meeting was discussed also the situation in relation to the floods in the country. Eng. Glosov familiarized the Deputy Chairman of NAMRB with the activities that companies members of the Chamber do locally. Eng. Nikolay Nikolov presented the work of the BCC regional office in Burgas on the restoration of the monastery “St. Virgin Mary”. “We will cooperate also on the Kilifarevski monastery. We are working in “Asparuhovo”, Dobrich and Tarnovo. We have an agreement with the fire and rescue to help with equipment,” said Eng. Glosov. Dimitar Nikolov congratulated the Chamber for being a socially responsible organization and offered to prepare and sign an agreement between BCC and the National Association of Municipalities, which to include a plan for joint action in disasters, public registry of available equipment in the regions, as well as a list of experts who can participate in evaluation of the damages. As a third party in the agreement it would be good to be included also the Ministry of Interior as responsible institution on the part of the state. “We are not insured against disasters. When we have an algorithm – it is known who will call whom, who is the leader, what equipment is necessary and what kind of experts, we will respond much more effectively. Such an agreement would be a relief also for the payment of the activities which can be done within a week,” summarized his proposal Dimitar Nikolov.