Sofia’s Specialized Municipal Privatization Fund (SMPF) expects revenue of 16,326,770 levs this year. Estimated costs, however, are not to be underestimated – they are 14 million levs. This became evident from the report of the vice mayor in charge of finances of Sofia Municipality, Doncho Barbalov, submitted at the last meeting of the Town Council last week.
The amount is the sum of the net income from the privatization of municipal property plus the revenue from interests and repayment of loans provided by the SMPF to Sofia Municipality and companies with local participation. The fund collects the moneys received from the sale of municipal property, while the goal is the amounts from privatization in Sofia to be reinvested in strategic projects.
At the end of last year the balance on extra-budgetary account of the Fund was reduced to zero due to the entry into force of the Law on Public Finances. Since the beginning of this year (Decision № 725 of Protocol 54 of 19 December 2013 a) the fund is a secondary budget spending authority. According to the document the money transferred on 1 January was 1.821 million levs less than in the previous year. The reason, according to the author of the report was the unfavorable investment climate in 2013.
According to the approved work programme of the Fund (decision №65 of the Municipal Council of 13 February) at the beginning of the year the revenue from privatization activity were estimated at 9.5 million levs.
The report shows that revenue from sanctions under the post-privatization control were extremely a difficult task for the administration. For this year they were 60,000 levs. Out of the interest-free loans granted by the Sofia municipality, the fund must collect 400,000 levs, while from the state budget it should collect 4.899 million levs.
Obviously, the loan granted from the Fund to the City Hall for the system of automated fare charging for passengers from 2005 that amounted to nearly 1.5 million levs, will not be paid back this year. Precisely for this reason, the authors of the report Doncho Baralov and head of the budget committee Orlin Alexiev offered this obligation "to be transformed as a grant"!
The document also says that the privatizers of Avtoremont Ltd. was ordered to pay 200,000 but in practice to collect this sum is impossible, because the accounts of the enterprise have been emptied.
Tthe municipal company was privatized in 2003 by the only candidate Bulgaria Energy Corporation Ltd (BEC Ltd) for an initial price of 1.06 million levs, with a promise to make a 170,000 lev-investment. The post-privatization control proved that BEC Ltd. failed to pay a loan of about 200,000 levs of the Sofia Municipal Transport Company Avtoremont to the municipal privatization fund and the company also owed several thousands of levs for the transaction of the privatization of the municipal company. After nearly 10 years, the municipality still has not collected the money. According to the information system Daxy in May 2006 BEC Ltd became 100% owned by the US Willming Invest LTD with manager Simeon Boev. It is BEC Ltd. That is the owner of Sigma Rent EAD, which in 2004 on its turn registered the company Sigma Repair Ltd., and in April 2006 contributed in kind part of its land in park Vazrazhdane, which is a scandal described in details then by the BANKER weekly.
As for the projected costs, the report makes it clear that the priority of the Fund remains the new construction and expansion of kindergartens and implementation of strategies and programmes for the development of the capital as adopted by the Municipal Council.
