State Supports Railway Projects

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Literally in the last days of it period in office, the caretaker government will support three major railway projects to be implemented under the current operational programme “Transport”. The team of Transport Minister Nikolina Angelkova has already developed and offered to coordinate a draft decision of the Council of Ministers. It will allocate 6.7 million levs for the section Parvomai-Svilengrad as part of the railway line Plovdiv – Svilengrad; additional 5.3 million levs for the modernization of the section Septemvri-Plovdiv and another 3 million levs to the railway line Plovdiv – Burgas. The funds will be provided through additional capital transfers to the National Company Railway Infrastructure on account of restructuring costs in the central budget.

Ministry of Transport explains its intentions with the fact that the tenders held in 2011 and 2013 on major rail projects funded under the Transport programme managed to save 25%, or about 40 million levs. And if the government of Georgi Bliznashki provided additionally a total of 15 million levs, the sum will put at least a temporary order in the overall mess with those projects. The amount covers part of the duties of the state company for financing of construction works by the end of this year, which according to data from the transport ministry come to 63.143 million levs without VAT. Obviously, there is a shortage, but Minister Angelkova has already announced that it will be partially covered by shifting 30 million levs provided initially for repairs to Railway Infrastructure company. The remainder will most likely be at the expense of capital transfers of the railway firm for 2015.

This complex financial obfuscation has another purpose – to continue with the construction of the second phase of the Western arc of Sofia ring road – from the river Kakach to the future North Speed Tangent. That is why the ex-government of Mr. Oresharski decided to terminate the project and transfer 30 million euros of the money for it to the reconstruction and modernization of railway sections. But these ideas are not to the liking of the caretaker government, which is trying not to lose money from Brussels allocated to infrastructure.

Otherwise, the situation with the three railroads is really critical. When the state has an approved budget of 405.7 million levs for “Reconstruction and electrification of the railway line Plovdiv – Svilengrad under corridors IV and IX, Phase 2: section Parvomai-Svilengrad” the physical progress so far is 26.9% and only about 30 percent of the funds have been used. The national company justified the delay with the due change of the route around Simeonovgrad and the established coordination procedure with the environmental ministry, and also because of the opening of four new archaeological sites – two in the village of Nova Nadezhda and end two other near Preslavets. After the appointment of the caretaker cabinet the work has accelerated, but the deadline for completion is September 30 and it is more than clear that it will not be met.

It will be a spectacular failure if Bulgaria proves to be unable to cope with this problem next year when the deadline for the absorption of money is running out, as several successive governments fail to complete the line from Plovdiv to Svilengrad. It was financed from pre-accession programme ISPA and its construction began back in 2007. At the end of 2010 just the stretch to Parvomai was ready and the contracting for route from Parvomai to Svilengrad – Italian Astaldi gave up and the country lost 70 million euros in the aid grant. Then the segment was transferred for funding under the Operational Programme Transport and to catch up with the delay, its construction started with money from the budget before approval was obtained from Brussels.

On the modernization of the line Septemvri-Plovdiv a sum of 521.1 million levs has been provided (excluding VAT), but so far what has been paid is only 17% of the money, the construction works have not been performed even at 10 percent. Actually, although the first sod of the three subdivisions (September – Pazardzhik, Pazardzhik – Stambolijski and Stambolijski – Plovdiv) has been turned, at this stage contractors have given only documentation for approval of construction materials and have performed acceptance tests. Partially finished are the projects for some of the road overpasses and the expropriation procedures are prepared. In fact, the mandatory information billboards state that the deadline for completion of construction is September 31, 2015.

After making inspection on-site caretaker minister Angelkova said the most worrisome is the situation in that part from Pazardjik to Stambolijski, which is completed at only 6%. The construction of the railway line Trakia between Plovdiv and Burgas also did not go smoothly. The Ministry has already agreed with the European Commission the construction of some units pertaining to the project to be transferred for financing from the new programming period in order to reduce the cost of the project, which is over 470 million levs.



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