Financial and business news from Bulgaria

BSP: From Government Actions We Will Lose 150 Million Leva

BSP takes care of the people and GERB for the interests of certain business circles
“By granting a concession at the profitable airport “Sofia”, the Bulgarian state gave up over half a billion leva. This money has been invested in the reconstruction of Terminal 1, construction of a new runway, as well as a new terminal 2-210 million euros financed by the European Bank for Reconstruction and Development, the Kuwaita Fund for Economic Development, the EU ISPA and PHARE programmes, as well as the Bulgarian state budget. I would remind you that only $62.6 million was spent on the construction of the runway by the Kuwaite Consortium, while additional Sofia Airport was ordered to pay penalties another $37 million.” This is written in a letter to the Minister of Transport Rosen Zhelyazkov, Deputy Chairman of the BSP for Bulgaria PG Georgi Svilenski on the occasion of the concessions at airports “Sofia”, “Varna” and “Burgas”, as well as the scandalous rescheduling of the charges of the concessionaire “Soph Connect” related to the Paris-based Meridiam Fund and the Austrian Strabag.

In his letter, the socialist points out that he is bewildered by the fact that when choosing a winner they indicated that the applicant had committed not to raise fees in the first 10 years, and suddenly in the autumn of last year - 30 October 2020, the state airport still raised the fees dramatically. “Interestingly, only 3 days before that — on 27.10.21, the concessionaire submitted a proposal for the first 10 years not to pay fees. So in practice, on the one hand, you monetize him, and on the other hand you exempt it from fees. Even more frightening is that these revenues are at the expense of the tourism sector because it is clear to everyone that the lifting of airport charges will be reflected by reducing the passenger flow and especially the flow of tourists to Bulgaria”, said Svilenski.

“Why, since the forecast of most analysts indicates that the crisis among the airline operators will end in 2022, you have easily rescheduled the concession payments at Sofia Airport for 10 years, and at the airports “Varna” and “Burgas” by one year each?” asks the Deputy Chairman of the BSP for Bulgaria” Svilenski.

He also points out that future receivables are valued at net present value. In the case of the concession of Sofia Airport - payments of 24.5 million euros annually for 35 years, the net present value, in his words, is EUR 425.67 million. When transferring the concession fee for the first 10 years in the last 10 years, the net present value is 275.09 - or the damage to the Bulgarian state is over EUR 150 million. “We take care of people and you care about the interests of certain business circles”, the socialist said.

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