Банкеръ Weekly



The European Investment Bank (EIB) canceled EUR20MN from its programme. The money had to be used for a state-guaranteed loan, intended for the reconstruction of the Sofia ring-road. The road's modernization was planned to begin in August 2001 and be completed by the end of 2002. In the meantime, the Road Executive Agency that is responsible for the implementation of the project accumulated huge debts. However, officers of EIB sent a letter on June 16, informing the Road Executive Agency, the Sofia Regional Administration and the Sofia Municipality, that the money planned for modernization will support another road in Bulgaria.The bankers say that they are no longer interested in the site. They imply that they withdrew because of the bureaucracy in Bulgaria, explained engineer Ivan Gechev, Sofia Deputy Mayor, to the BANKER weekly. He explained that the creditor has taken this measure after having waited eleven months for Sofia's Governor Rossen Vladimirov to initiate proceedings for expropriation of the land on both sides of the road needed for the future expansion of the road.The story about the repair of the ring-road began two years ago. According to an agreement signed by the Ministry of Regional Development and Public Works and the Sofia Municipality in 2000, Sofia's Mayor Stefan Sofiansky announced a tender for preparation of a preliminary reconstruction project. This is a state-owned road but it is of great importance to the capital. That's why we wanted to spend money on it, explained Ivan Gechev.Patproekt 2000 EOOD was the winner in the tender. The city council paid BGN500,000 to the contractor. The Ministry of Regional Development and Public Works approved the tender results in June 2001. The opening of the expropriation procedure was approved by the Governor Rossen Vladimirov after seven months. However, it did not happen until December 12, 2001, when EIB's representatives asked in a letter the Ministry of Finance about the reason for the delay. The expropriation order was signed in January 2002, but the city council did nothing to fulfil it, said the Deputy Mayor.The municipality also paid BGN100,000 for evaluation of the impact of the project on the environment. On January 11, 2002 the Supreme Ecological Experts Council at the Ministry of Environment and Water approved it and allowed the initiation of the construction works. Under the State Property Act, in end-January the Finance Minister Milen Velchev allowed the expropriation of land on both sides of the road. Without the consent of the regional administration, however, the repair works cannot begin because the land should be property of the State. This is how a EUR20MN investment was delayed for a long time. The reconstruction had to cover the southern arc of the ring-road, which was planned to be transformed from a second-class republican road into part of a motorway. Later, it was planned to link the future Lyulin and Struma highways. The project stipulated that the construction works begin in August 2001 and be completed by December 2002. A 49-km road from the Boyana residency to Dragalevtsi quarter has to consist of six beds - three in each direction. Still, in its letter dated June 16, the EIB left a loophole which allowed the municipal officers to hope that the ring-road could still be reconstructed, provided it became part of a future agreement. The European bankers also set one condition - the land should be expropriated by the end of 2002.

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