Банкеръ Weekly

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Rightists Ask for EC Intervention Against South Stream

European Commission should intervene in the contract for construction of the South Stream pipeline to remove distortions in it, called this week in a special declaration MPs from the rightist Blue Coalition. According to them, our country will lose annually 40 million levs in revenue from transit fees as South Stream has made the 90 mile stretch of our national transmission system from the Romanian border to the Municipality of Provadia redundant. For this no compensation has been provided.


The statement also says that the amount of the fees will be determined by the company South Stream Bulgaria in which Gazprom holds the blocking quota, and Russia will seek to reduce them to a minimum in order to increase their competitiveness on the European market.


This means that the Kremlin will acquire ownership of the South Stream - Bulgaria and hence permanent ownership of the pipeline on European soil, said MP Ivan Ivanov.


Another accusation to the government of Boyko Borissov is that the investment for the section on Bulgarian territory is unacceptably increased from 1.1 to 3.3 billion euros from Moscow unilaterally, without having assessed the impact on the environment and without a final technical project to determine the required amount.


These are outright lies and the people from the Blue Coalition know they are not true, replied to the charges the Minister of Economy and Energy Delian Dobrev. He pointed out that the revenue of Bulgartransgaz from transit fees will not be reduced by even a penny because the currently existing transit contract is not changed.


In his words, the first concrete figure for the value of the investment in the South Stream on our territory is 3.308 billion euros, according to an evaluation of the designers. What will be the final price will become clear only when the procedures for selecting contractors comes to an end. After a clear cost of the project and its funding sources are determined, the experts may fix the transit fee, Dobrev said. The Minister pointed out that the rate of return of the South Stream is 8 percent and the facility will pay off investment for no more than 15 years - a clause enshrined in the intergovernmental agreement form 2008.


However, the rightists insist on a meeting with European Commissioner for Energy, Guenther Oettinger, to acquaint him with concerns that South Stream does not meet the requirements of the third energy liberalization package as it does not allows the pipe to transport gas from third countries.


The BANKER

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