Bulgaria inherited relatively high line density from the pre-transition period. Recent
investments increased further the fixed line telephone penetration from 31.8 lines per 100 inhabitants in 1997 to about 33.6 lines per 100 inhabitants in 1998. The quality of the network is less advanced. The level of digitalisation of local lines was quite low
in 1998, at only 8 per cent. Digitalisation is more advanced for the international and
long distance networks, at 100 and 80 per cent respectively. Although mobile
telephone penetration has trebled during 1998, the level is still low at 1.6 per 100 inhabitants, leaving considerable room for growth.
A long-term programme of digitalisation has begun, primarily aimed at improving business services. Its first phase, Project DON (Digital Overlay Network), was completed in 1998, with assistance from the EBRD. This put in place a new international exchange, 11 trunk exchanges and a number of local exchanges (all
digital), two optical rings, digital relay links and more than 100,000 new subscriber lines with access to digital exchanges. A second phase of the programme is currently being implemented, with the aim of broadening local line digitalisation.
The adoption of the new Telecommunications Law in 1998 introduced a liberalised regime for activities in the telecommunications sector. All services were liberalised except voice telephony and leased lines, which will be opened to competition on 1 January 2003. This is well in advance of the WTO commitment of 1 January 2005.
One major facet of the reconstruction remains - the privatisation of the national telecommunications provider, BTC, which will finally remove the conflicts of interest which are bound to exist in a mixed market environment with the State as policy maker and regulator, and the State as telecommunications operator. Subsidiary to this, but none the less essential to telecom development, is the award of a second GSM license.
The Bulgarian Telecommunications Company (BTC) is in the process of privatisation.
The government is negotiating a deal with a consortium of OTE (Greece) and KPN (the
Netherlands). Under the deal, OTE-KPN would obtain 51 per cent in BTC, which has
a monopoly on fixed-line communications. The final outcome after long and many discussions, however, has been the termination of the negotiations and the collapse of the deal. The consortium would also receive 51 per cent of analogue cellular operator Mobikom and a licence to establish the country’s second cellular GSM operator.
The launch of a second GSM service will mean that there will be two directly comparable and directly competing service providers in the same market sector.
The contest between the second licensee and MobilTel bids fair to be a significant event in the development of the Bulgarian market economy. Examples from other parts of Europe have shown that in general such competition provides a win-win situation for all; the size of the telecom market increases, spurring on development elsewhere in the economy, and market forces drive the introduction of the latest products and services.
priorities for investment by the bulgarian authorities Priority investments in transport infrastructure
The development of transport and transport infrastructure is one of the priorities set out in the Programme of the Bulgarian Government. The implementation of Bulgaria’s main objective – the accession to the European Union, NATO and the other Euro-Atlantic structures - highlights the necessity for a national transport system comparable to a European one.
According to an interdepartmental programme on the development of transport infrastructure drawn up by the Ministries of Transport and Communications and of Regional Development and Public Works 1,200 million Euro will be needed for rehabilitation and construction of roads of national and international importance; 250 million for local roads; and 3,800 million Euro for other transport infrastructure projects.
This programme will create 15,000 jobs in the road construction industry. Projects relating to the international transport corridors will be financed through loans (28%); grants (21%); national budget (27%); concessions and BOT (build-operate-transfer) ventures (13%); and own resources (11%).
The combination of an advantageous geographic location and Bulgaria’s determination to achieve its objectives in joining the EU have committed the Government to completing a number of projects along the routes of five of the ten Pan-European Transport Corridors, as determined by the Pan European Conferences of Transport Ministers in Crete (1994) and Helsinki (1997).
The participation of Bulgaria in the TINA project is a very important component of the development of transport infrastructure. The starting point of the TINA process is the so called TINA backbone network based upon the 10 Pan-European Transport Corridors approved with some adjustments at the third Pan-European Transport Conference in Helsinki in 1997. For this backbone network, construction costs have been estimated on a common base using existing information and input from the TINA countries.
For the Republic of Bulgaria the TINA backbone network is defined and adjusted by sections and transport modes on the base of the 5 Pan-European Transport corridors, passing though the territory of the country (see the TINA network map). The cost of aligning the backbone network in Bulgaria to EU standards has been estimated in the TINA report at Euro 4,095 million, of which the road network accounts for Euro 2,165 million and the railway network Euro 1,930 million.
To this has to be added the cost of aligning the "additional network components" for both road and rail, as well as the estimated costs of developing to EU standards of Bulgarian airports, seaports, inland waterways and combined transport terminals.
The following describes the main alignment of the five corridors crossing Bulgaria:
Trans-European Transport Corridor IV
Dresden / Nuremberg – Prague – Vienna / Bratislava – Budapest – Arad – Bucharest - Constanta / Craiova – Sofia – Thessaloniki / Plovdiv – Istanbul
Trans-European Transport Corridor VII
The River Danube
Trans-European Transport Corridor VIII
Durres – Tirana – Skopje – Sofia – Plovdiv – Bourgas - Varna
Trans-European Transport Corridor IX
Helsinki – Saint Petersburg – Moscow / Pskov – Kiev – Ljubasevka – Chisinau – Bucharest – Dimitrovgrad – Alexandroupolis
+ Kiev – Minsk – Vilnus – Caunas – Klaipeda / Kaliningrad
+ Ljubasevka – Odessa;
Trans-European Transport Corridor X
Salzburg – Ljubljana – Zagreb – Belgrade – Nis – Skopje – Veles – Thessaloniki
Branch A Gratz – Maribor – Zagreb
Branch B Budapest – Novi Sad – Belgrade
Branch C Nis – Sofia (Dimitrovgrad – Istanbul through corridor IV)
Branch D Veles – Prilep – Bitolja – Florina – Via Ignatia – Igoumenitsa
The Programme of Transport Sector Development also includes the construction and development of:
Construction of a second bridge over the Danube linking Vidin with Calafat.
Restructuring, rehabilitation and modernisation of rail transport, including reconstruction and electrification of railway Plovdiv - Svilengrad - Greek/Turkish border.
Rehabilitation, modernisation and development of the national road network.
The construction of a grain terminal, a silos storage facility and the construction of railway and road transport loading/unloading facilities in the port of Varna.
The construction of a roll on/roll off and container terminal on the island beneath the Asparuh Bridge in Varna.
The construction of five terminals in the port of Bourgas: liquid cargo; bulk cargo; general cargo; ferry boat and Ro-Ro; containers as well as new breakwaters.
The building and re-construction of the following terminals and facilities in Port Rousse: zone for bulk cargo; container terminal; zone for general cargo handling; repair complex for port machinery; container repair facility; grain terminal; zone for custom bonded cargo handling; Ro-Ro terminal; DAEWOO terminal; transit river-sea cargo zone; avant-port area; administrative and storage zone; storage zones.
Building and reconstruction of infrastructure and equipment in the port of Lom.
Construction of a container and combined transport terminal in the port of Vidin.
As a result of the adopted national transport policy for priority development of the transport corridors and the already established fruitful co-operation between the European Union and Bulgaria in the field of the strategic planning of the Trans-European transport networks, significant experience was gained when determining the national transport priorities in relation to the Pan-European corridors. Business and master plans, pre-investment and feasibility studies, financial schemes for construction, etc. for all major infrastructure projects in the country (including rail infrastructure, roads, sea and river ports, Sofia and Bourgas airports) were prepared between 1992 and 1999. Projects for the rehabilitation of the Bulgarian State Railways and the national road network were also prepared.
In this context, a large-scale study was financed under the PHARE programme and with the participation of European consulting companies. The summing up document for the planned development of the transport infrastructure of Bulgaria was produced under the title "Forecasts and Investment Programs for the Development of the Transport Infrastructure of Bulgaria for the period till years 2000 and 2010."
In accordance with the described priorities and principles for planning and construction of infrastructure projects, the Government of Bulgaria has developed and adopted a four-year Middle-term National Investment Programme for the period 1998 – 2001. This Programme clearly determines the obligations of the State Budget for development of the country’s overall infrastructure requirements, including the transport sector. There are 25 Ministry of Transport and Communications projects approved in the National Investment Programme. These have been allocated a total State budget contribution of approximately Euro 480 million for the period 1998 to 2001 (this figure excludes other possible sources of financing).
The transport part of the Programme consists of projects with multinational importance situated along the Pan-European Corridors.
The projects in the Programme and in the Strategy of the Ministry of Transport and Communications for development of the transport infrastructure are listed with an indicated ranking, according to their priority.
In addition to the Middle-term Investment Programme, the Ministry of Transport and Communications has elaborated an Investment Programme for Development of the Transport Infrastructure of the country, with 36 national investment transport projects and the investments necessary for their construction till year 2015 (estimated total cost of approximately Euro 4,890 million).
This programme includes the 25 projects covered by the Middle-term National Investment Programme of the Government. The projects are in the field of railway, combined, road, maritime (sea and inland waterways) and air transport. They are primarily situated along the five Pan-European Transport Corridors passing through the territory of Bulgaria. The funding for these projects will include investments by the State budget and other financial sources such as taxes on liquid fuels, credits by the international financial institutions, public-private and private concessions, and EU financial instruments.
Included as well are the cross-border co-operation programmes with Turkey and FYROM, to be launched in 2001. They involve 80 projects worth 408 million Euro in total. By 2005 the Regional Development Ministry is planning to build sections of the Trakia, Maritsa, Lyulin, Strouma and Hemus highways in order to complete the national motorway ring, and to construct the Sofia-Nis transit road.
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