Банкеръ Weekly

Briefs

HASSAN HASSAN TO SORT OUT AGAIN

After two days of exhausting negotiations held at the Ministry of Regional Development and Public Works, the firms which were willing to participate in the Bourgas-Alexandroupolis project failed to reach an agreement on the distribution of the Bulgarian share. By November 15 letters of intent were submitted by Glavbolgarstroy, Gazstroymontazh, Holicon AD, LUKoil-Bulgaria, Magnum-07 Ltd, Monolit-3 Ltd, Interneftigazmontazhi, Chimremontstroy and Minstroy Holding. Early this week the group was joined by two more companies - the Sofia Control and Welding Devices and Transstroy Bourgas Ltd. They had missed the deadline (November 15), set by the ministry, to apply for the project, yet their offers were not turned down. The prompt firms also approved unanimously of the two latter companies' participation in the negotiations.The Bulgarian quota's distribution was the only topic of the two-day discussions. Although the representatives of Transstroy Bourgas Ltd did not turn up at the meeting, the applications of the other ten candidates exceeded by almost 2.5 times the Bulgarian share. Most probably the State will have to step in, predicted Simeon Peshov, President of Glavbolgarstroy. He applied for a share of more than 10% in the future company on the project. Mr. Peshov also did not exclude a majority stake to be acquired by LUKoil-Bulgaria. But according to the acting Minister of Regional Development and Public Works Hassan Hassan, who does not participate in the talks, neither of the firms should be given such a privilege. Mr. Hassan offered to the applicants to establish Bulgarian Operation Company with a capital of EUR500,000. The State will keep the golden share in it, which will guarantee the Bulgarian national interests in the Bourgas-Alexandroupolis project. During the two days of negotiations the candidates had to approve this company's articles of association as well, but did not manage to do that for lack of time.The Ministry of Regional Development and Public Works announced that by Monday (December 2) the agreement for distribution of the Bulgarian share should be signed. On the next day - December 3, in Athens will be signed the trilateral memorandum between Bulgaria, Greece and Russia. It is possible that it will be signed by Minstroy Holding, LUKoil-Bulgaria and Chimremontstroy as representatives of the Bulgarian participants in the project. This decision was made at a meeting of the trilateral committee in January, 2002, in Moscow. Yet the problem about the supply of the required quantities of oil is still pending. Simeon Peshov comments that without this oil the pipeline becomes inefficient and useless. The problems around the financial guarantees of the project also remain. Their decision was postponed till January 15, 2003, by when the Bulgarian firms should have prepared all the required documents for the establishment of the Bulgarian Operation Company. Its capital will cover operation costs, explains Hassan Hassan. The feasibility studies, carried out by the German consulting company ELF, have not been presented to the Bulgarian side, as the fee of EUR325,000 is still due to be paid.More information about the research was presented by Christos Dimas, representative of the Greek consortium DEP Traki, at the international conference Transit and Supply of Oil and Natural Gas in Central and Eastern Europe, held in Sofia during the week. Mr. Dimas said that the construction of the 224-km-long oil conduit would cost between EUR680MN and EUR700MN and the fee for the transit would be USD5/ton. On the fifth year the installation's capacity is expected to reach 35 millions tons of crude oil. Yet Mr. Dimas underlines that today there are still no guarantees for the oil supplies.And while our firms failed to distribute the stakes in the Bulgarian share of the Bourgas-Alexandroupolis project, the experts participating in the international conference agreed that the oil-transfer routes through our territory were meeting all requirements of the Western investors. It was also revealed that the pipeline through Romania would not be a transit one, but would provide direct supplies of oil to the neighbouring refineries.

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