In 2015 the construction industry will have BGN 2 billion for investment, of which BGN 1.5 billion is provided for payment of projects that are currently being implemented and will be completed next year, and BGN 460 million are for sites from the 2014 – 2020 programming period, said Lilyana Pavlova, Minister of Regional Development and Public Works, at the fourth panel discussion “Construction in 2015 – prospects and challenges. Opportunities in the new 2014 – 2020 programming period.” It was organized by the Bulgarian Construction Chamber (BCC) with the media assistance of “Stroitel” newspaper and took place in “Sofia Hotel Balkan”. The forum brought together over 200 representatives of the central and local government as well as leading construction companies.
The event was opened by Eng. Svetoslav Glosov, BCC Chairman. He read greetings from Kristalina Georgieva, European Commission Vice- President for Budget and Human Resources, and Iskra Mihailova, Chairwoman of the Committee on Regional Development to the European Parliament. “Despite the difficulties, construction is one of the main engines of economy in all countries. You are the ones who change the face of Bulgaria. Be active and do not hesitate to participate in European programs so that people in our country feel the effects of EU membership,” said in the address EC Vice-President to participants in the forum.
“This forum in recent years has become a significant event for the construction sector of Bulgarian economy. Its conduct provides opportunities to create a constructive dialogue between state institutions, local government and businesses to exchange experiences, opinions and ideas,” said in her congratulatory address Iskra Mihailova.
The opportunities for construction in 2015 presented except Lilyana Pavlova, Minister of Regional Development and Public Works, also Ivelina Vasileva, Minister of Environment and Water, Ivaylo Moskovski, Minister of Transport, Information Technology and Communications, Vasil Grudev, Deputy Minister of Agriculture and Food, Lyubomir Hristov, Deputy Mayor of Sofia Municipality, Eng. Stoyan Bratoev, Executive Director of Metropolitan EAD, Eng. Lazar Lazarov, Chairman of Road Infrastructure Agency, Eng. Asen Antov, Executive Director of National Company Strategic Infrastructure Projects.
“The forum of BCC is very important to us. We are aware of the possibility and importance to discuss how we end this hard year and what is coming next year. In the Council of Ministers was adopted the draft law on state budget for 2015,” said Pavlova and added that next year Bulgaria will have new 120 km motorways, 44 km first-class roads and 300 km rehabilitated routes of first, second and third class.
“One of the tasks facing us is to finish all projects under OP “Transport”. To my great regret each one of them has a delay of almost one year. By November 2015 it is necessary to build the sites despite the problems,” added Pavlova. Among the projects that should be ready next year are Maritsa Motorway, Lot 4 of Struma Motorway and road junction Belokopitovo of Hemus Motorway, the bypass road of Montana, and the western arc of Sofia. Routes under the program “Transit Roads” V will be rehabilitated. They have a total length of 300 km. For the purpose of the draft budget for 2015 are pledged BGN 100 million.
In the field of water and wastewater infrastructure Pavlova said that the government’s priority is completion of the water reform, which is the basis for the absorption of EU funds under Operational Program “Environment”. “The sector is in serious condition, water losses are huge. We need EUR 11.7 billion to update the entire system,” said Pavlova and stressed that if implementing the water reform we can count on EUR 2 billion under OPE until 2020.
Minister Pavlova ensured the construction business that the state would not delay payments on projects that are funded by the suspended EU funds. “This is important both for business and for the state, because if not settled, we could lose EUR 106 million under 28 projects at risk,” she said and urged the business to certify more quickly the implemented activities so as not to lose EU funds. The minister assured that not to be zero year 2015 with respect to EU money, will be opened measures for collecting projects. “From 2015 will start the schemes “Integral plans for urban development”, “Regional educational infrastructure” and “Regional roads.” They will receive BGN 180 million for the entire funding period,” said Lilyana Pavlova.
Minister of Transport, Information Technology and Communications Ivaylo Moskovski pointed out that maximum efforts are exerted for the opening of Operational Program “Transport and Transport Infrastructure”. Negotiations with the European Commission continue and OPTTI is expected to be approved very soon. Talks with EC aimed at financing of the first section of Hemus Motorway – from Yablanitsa to the road Lovech – Pleven. “We are trying to include the route of the motorway Hemus in OPTTI together with the tunnel under Shipka but so far the EC does not accept it. Brussels believes that the main priority is the construction of Lot 3 of Struma Motorway. The site of Hemus Motorway however will be executed regardless of the final decision of the Commission,” said Minister Moskovski.
Eng. Asen Antov, Executive Director of National Company Strategic Infrastructure Projects (NCSIP), said that the biggest challenge in 2015 will be to find a reasonable and balanced solution for Lot 3.2 of Struma Motorway. “The passing of the motorway through the Kresna Gorge is a very complex project. It should be reviewed because of geological risks, time constraints, sustainability, environmental and economic side,” added Eng. Antov. In his words next year NCSIP will announce many public procurement orders. The largest construction tenders will be for the separate stages of Hemus Motorway and the tunnel at Zheleznitsa village, which is part of Lot 3 of Struma Motorway.
“The main ambition of Road Infrastructure Agency is to complete the projects under OP “Transport”, said Eng. Lazar Lazarov, Chairman of RIA. Among them are the two lots of Maritsa Motorway, Struma Motorway, the bypass road of Gabrovo, Montana and the western arc of Sofia. “In 2015 the regions that are our priority are the speed road Vidin – Botevgrad, Kalotina Motorway, road junction “Lyulin”– “Boyana”, the tunnel under Shipka near Gabrovo, the speed road from Ruse to Veliko Tarnovo,” explained Eng. Lazarov.
“We will conduct a series of actions to accelerate payments under OP “Environment 2007 – 2013” to be verified very fast the requests for funds that are presented by the municipalities. By the end of the year we will bring certificates worth BGN 400 million in EC,” said Ivelina Vasileva, Minister of Environment and Water. After an inquiry by Eng. Ivan Boykov, Executive Director of BCC, she replied that instructions were given for the rapid recovery of VAT to companies executors of sites under OPE.
According to her, in “OPE 2014 – 2020” are set in axis “Water”- BGN 2.4 billion, for “Waste”– BGN 520 million. “Innovations in OP “Environment” in 2014 – 2020 are linked also with the implementation of other type of projects related to the prevention of floods and landslides. Systems to monitor the levels of river basins will be built to prevent flooding of adjacent territories. For this axis are provided BGN 155 million. Infrastructure measures are included here,” added Vasileva.
“At the earliest in the third quarter of next year will be able to start the implementation of measures of the Program for Development of Rural Regions (PDRR), which could benefit the construction sector,” said Vasil Grudev, Deputy Minister of Agriculture and Food.
According to him, the construction sector can take advantage of opportunities in a total 5 measures under PDRR – investment in tangible assets with an indicative budget of EUR 760 million, development of farms and enterprises – EUR 173.4 million, basic services for the renovation of villages and rural areas – EUR 625.7 million, investment for development of forest areas – EUR 64.3 million, and for local development – EUR 129.9 million.
Eng. Ivan Boykov, BCC Executive Director: Legislative reforms are needed
There will be funds under the new operational programs. The question is whether builders will be able to benefit from them. Unfortunately, between the state and the project contractors there are municipalities through which pass the payments. When the state is not a direct payer, the process is complicated. There is a temporal order in which local governments receive the capital that performers act to them. This process is not well synchronized. A problem arises on the background that money is not enough. I hope by the end of the year the state and the municipalities will pay the builders for all activities performed. This is very ambitious since obligations to the industry already exceed BGN 2 billion. They are accumulated to projects under different operational programs, not only to problematic OP “Environment” and OP “Regional Development”. Sums are not paid also to OP “Transport” and to the Rural Development Program.
In the current programming period should be made a number of changes. Reforms are required in the process. That is why the Bulgarian Construction Chamber prepared three laws. Improvement of some regulations is needed. It is important to have synchronization between participants in the process – from the preparation of tenders for public procurement contracts to implementation of the projects. Institutions in this chain are many but unity between them is missing.