Банкеръ Weekly

Briefs

END OF PRIVATISATION IN SOFIA MUNICIPALITY IN SIGHT

Ten years after the launch of the privatisation process in the Sofia Municipaly, it turns out that very soon there will be nothing left for sale. Sofia Municipaly has remained with only 7% of its former property in the city, informed Petar Dzhorinsky, Chairman of the Supervisory Board of Sofia Municipal Privatisation Agency (SMPA). In 2003 the municipality will sell eight more companies in which it still holds majority stakes. By the end of the year it is expected that Public Lighting, Road Signalization and Public Planting will become private companies. The other firms in the list are SKGT Autoremont AD, Progress, BKS-Centre, Intergral - 98 Ltd and Sredetz Ltd. Moreover, in case the Ministry of Transport and Telecommunications gives permission, the Sofia Municipality will put for sale Tramkar - the plant for trams and trolleys, the road repairs plant Patishta Saorazhenia, the municipal firm International Transport and Tourism - Sofia and Bulgarplod - Slatina. No doubt among the most attractive to-be-privatized firms are Sofia Pharmacies AD, the two firms for taxi services - Taxi-S Express and Softaxi and the transport firm Avesta Trade. They are also among the small number of firms which are working on profit.The first company to be offered for sale by competition on March 10 is Progress EAD. 75% of its capital are evaluated at an initial bidding price of BGN21,000. On April 7 at public tenders candidate-buyers will bid for 10,000 individual shares (20% of the capital) of each of the companies - BKS Lozenetz AD and BKS Zaoad AD. The initial bidding prices are BGN160,000 and BGN40,000 respectively.All public WCs in Sofia should be put up for sale by the year-end. Their total number is 46. The SMPA decided to take this step due to the unusual popularity of public WCs in the centre of the city in the last couple of years. The new owners, however, will have to redesign the utilities so as to provide access for disabled and old people.The privatisation of the public equipment in all high-rise residential buildings for pumping up of water are also expected to attract considerable interest. The equipment itself is placed in a single concrete cage and the rest of the room can be turned into workshop, small shop or just a store.The SMPA expects that by end of the year the totoal size of privatisation revenues will reach BGN7MN. Experts underline that the offered opportunity for rescheduled payments might reduce this sum to BGN6MN. Part of this money is planned to pay for the reconstruction of the Central Railway Station which was started in the summer of 2002.According to Petar Dzhorinsky the fact that 92% of the municipal property in Sofia is already private is a good sign. The municipal privatisation proved its positive significance for the city's structural and economic reforms and for the provision of more working positions, says the Chairman of SMPA's Supervisory Board.The Municipality will preserve majority stake in only several companies, connected with strategic activities like central heating, water supply and sewerage, public transport and the Underground. In the last ten years since it was establishged the Agency has signed 1,724 deals for USD125MN. 807 facilities were sold by tenders, 255 - by competition, and 99,563 firms were divested according to the preferential terms of the Privatisation Act, which was effective till April, 2002. The involvement of foreign investors, such as the fast-food chain KFC, Stambouli, Florina, Rottenberger, Mirolio, Mirkat, Euratech and Bulser, was pointed out as one of the most successful steps in Sofia Municipality's privatisation. As a result of the agreements signed with these firms the municipalty realized revenues of USD16MN and provided investments for the privatized facilities totalling USD7.5MN.

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