Банкеръ Weekly

Briefs

CONSTRUCTION WORKS AMOUNT GOES TO BGN4BN

The year 2004 is expected to remain historic in terms of the amount of construction works in Bulgaria, branch organisations announce. The total amount will be about BGN3.8BN-BGN4BN, which means BGN1BN above the level in 2000 when construction works amounted to BGN2.8BN.There are two reasons for the stir-up in the branch. One of them is the growing interest in residential buildings in the bigger towns and along the Black Sea coast. The other is the increased price of some construction materials and labour costs.According to the statistics, about 4.1% of the working force of the country was occupied in the construction sector last year. The real number of the employed varied between 95,000 and 116,000. Because of some peculiar labour relations between employers and workers that have not been included in the reports the figures look too low. Moreover, it is difficult to assess the number of people working illegally, although they are said to reach 20-25% of the actually reported figures. The number of workers in the public sector was 22,297 in 2000 and last year decreased to 10,175. The people employed in the private sector went up from 74,755 in 2000 to 106,362 in 2004.About 98% of all construction companies are private. Five per cent of them are large (with a turnover exceeding BGN15MN and more than 250 workers), 18% are mid-sized (a turnover between BGN5MN and BGN15MN and 51 to 250 workers), and nearly 70% are small ones (with 11 to 50 people employed and a turnover of up to BGN5MN). There are also micro-sized companies with less than 10 employees that account for 7% of the private companies.The biggest problem of Bulgarian construction companies is their inability to compete with foreign companies as well as with the increased requirements for participation in Bulgarian tenders co-financed by foreigners. There is considerable dumping in the branch and it worsens the quality of the construction, too. Many of the foreign companies present unrealistic low offers, win tenders and then hire Bulgarian subcontractors at very low prices. According to local constructors, it is the country's administration to be blamed. Above all, it gives assignments that are too difficult for their capacity.BGN283 on the average was the monthly salary paid to construction workers at the end of last year. However, this is just the declared level, experts comment. Wages are too often paid without a document which helps for avoiding payment of due taxes.

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