Trakiya Concession Under Question

The concession contract with the Bulgarian-Portuguese consortium for the completion of Trakiya Highway will be breached if the concessionaire fails to procure the financing necessary for the project by May 18, regional minister Assen Gagaouzov told Pari daily.

If the Portuguese contactor does not meet the deadline set by the Government, Gagaouzov will ask the Cabinet for additional funds from the state budget, the minister said.

However, if the Cabinet decides to grant financing to the consortium, the decision would need Parliament approval as well, he added. The  Government was considering to borrow 148 million euro from a private bank, according to Gagaouzov.

Experts reckon that such a loan was not a lucrative alternative, because interest rates were now considerably higher than the ones offered by the European bank for Reconstruction and Development and the European Investment Bank, but Gagaouzov declined to comment on the issue, Pari daily said.

In case of breach of the concession contract, it was possible that Bulgarian companies would be assigned to finish construction on the highway, Pari daily wrote, an outcome that Gagaouzov himself predicted only a month ago.

As previously reported by Pari, the list of possible Bulgarian contractors included Moststroy, owned by Vassil Bozhkov, Bulgaria’s richest man, and Glavbolgarstroy, headed by Simeon Peshov.

However, building works on Stara Zagora – Karnobat stretch, one of the two Trakia Highway’s sections, which has not been completed so far, will start at the end of 2008 at the earliest, according to Gagaouzov.

The average highway construction price fluctuates between 2.5 and three million euro a kilometre, Pari reported. Deputy minister Dimcho Mihalevski, though, said that this was the price before the latest hikes in fuels and bitumen prices.propertywisebulgaria.com