Банкеръ Weekly

Briefs

I AM EXPECTING WITH INTEREST THE OUTCOME OF THE BTC SALE DEAL

Nikolay Vassilev, Vice Premier and Minister of Transport and Telecommunications, to the BANKER weeklyMr. Vassilev, after the noise caused by the replacements in the managerial team of Navigation Maritime Bulgare (Navibulgar), rumours spread about serious personnel castlings in the Railway Administration Agency and in the Air Traffic Control.- I haven't heard about such rumours and I would not like to comment them. As far as Navibulgar is concerned, I think the issue has already been settled. Rossen Kostourkov, who was Navibulgar's Executive Director until recently, won a competition for a Director of Navibulgar's London office, which is a very important position. After several interviews with very strong candidates for the position of Navibulgar's executive director, I pitched on Hristo Donev, who has a serious experience in the branch. He owns two ships, i.e. he runs a tiny private fleet. His candidacy was positively accepted by the MPs from Varna. Thus, the issue about Navibulgar's management has been closed. Basically, we do not have any differences regarding the reforms in Navigation Maritime Bulgare and in the Varna Shipyard within the NMSII.How will the sale of the Varna Shipyard be effected?- I expect Navibulgar to approve this month the regualtions for a new procedure, which will be quite similar to that, launched by my predecessor. We hope to attract serious investors as early as this year. We'll make as many tries as necessary. The State cannot develop shipbuilding in the long run. The construction of Sofia Airport's new terminal has been terminated due to the change of the project, demanded by the chief executor - the Austrian company Strabag. According to expert evaluation, the change of the project would additionally cost between EUR11-40MN. Has the Transport Ministry already prepared its stance on this issue? And shall the Sofia Airport have a new terminal in 2005, as projected in the contract for the construction of the new facility? - Construction work stopped in the beginning of 2003. But for several weeks now there has been a chance for resuming it. Currently, a slight stir-up of Strabag's activities regarding Sofia Airport can be noticed. We have had several difficult meetings with the Austrian company where we made clear the position of the Transport Ministry, which is that Strabag should immediately resume construction work. All technical problems will be solved in the process of the work. We shall not agree to make ungrounded corrections, regarding the term for fulfillment and the amount of money. Sometimes, technical changes are necessary, e.g. of the type of foundation due to the complexity of the soil in the airport's region. The experts who carried out the geological research, demanded by the former transport minister Plamen Petrov, are adamant that no change of the project is necessary. The technology need not be changed from plain to the more expensive pile foundation...- I support Plamen Petrov's stance that no pile foundation is necessary, but a slight correction of the plain foundation should be made. Won't that lead to amendments in the contract, regarding the price and terms for implementation?- This will only result in well-grounded technical corrections of the contract, that should be proven in front of international consultants as well. But it won't result in additional, and ungrounded price increase or unwanted lengthening of the time for fulfillment. By the end of this month I expect Strabag's final reply to the question when the terminal would be ready. The situation is similar concerning the supply of equipment and the modernization of the new centre of the Air Traffic Control. The company Alenia Marconi which is implementing the project has several times insisited for an increase of the price. Why do such differences come up now?
- In both cases the stance of the Transport Ministry is firm. We insist on observing the initial contract. After talks with Alenia Marconi Systems, they undertook to make the successive tests in the year-end. If they are successful, it is highly possible for the entire project for modernization of Air Traffic Control to be completed in 2004. Otherwise, we should seek an alternative solution. Having in mind all the problems regarding the BTC sale deal and the recent stir-up in the global telecommunications market, don't you think that the option for hiring a foreign managerial team to run the national telecom has become more expedient? - At the present stage the Transport Ministry does not have any additional commitments to BTC's privatisation. We have long ago completed our duties and the procedure is no longer in our hands. We are expecting with interest the outcome of the divestment procedure. The sooner it is finalized, the better for BTC. But if the telecom remains in the State's hands, as its principal I should have alternative options at hand. I don't rule out the possibility to attract a foreign managerial team. For the time being, however, we are waiting for the privatisation deal to be effected. It is not necessary to take pains in advance before we see the result. Have you made any progress in the preparation of Navibulgar's and Bulgarian River Shipping's divestment? How do you estimate the idea of first offering for sale the stake, earmarked for privatisation on the stock exchange? - I look positively on that idea. According to me, the processes should be going on concurrently. It is very probable for Bulgarian River Shipping to be listed on the exchange prior the sale of the strategic package of its shares. In Navibulgar's case, there should be first some development regarding the Varna Shipyard. Afterwards we could talk about the sale of a minority stake in Navibulgar on the exchange.
Railway transport is one of the problematic sectors. What measures do you project for its rehabilitation?- You are acquainted with the first two importants steps, which we undertook. One of them is the signing of a contract with Kremikovtsi. The information as of today is that the iron and steel works has entirely paid off its current liabilities to the National State Railways (BDZ) after our intervention. For the first time since a year there has been a considerable progress in the repayment of overdue salaries to all employees of BDZ and of the Railway Infrastructure national company. This was effected by a contract with three banks (First Investment Bank), EIBank and ROSEXIMBANK), allowing overdraft when drawing money by debit cards. But this is a temporary solution of the problem. Medium-term changes in BDZ are inevitable. A package of measures is currently being worked out, to be discussed by the year-end. Corruption in the Transport Ministry is a frequent topic of talks. Are there any obstacles to a greater transparency in the licensing of private railway carriers and in the issuance of haulage permissions?
- Concerning the licensing of new ralroad carriers, we are ready to accept the applications of all serious candidates. I hope very much that the first private licences would be granted within the mandate of the incumbent Government. We would also like to delegate to branch organisations as many activities regarding the issuance of permission as possible, in order to diminish the role of the State.

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