The 2009 draft budget is tipped to be tweaked before getting the final nod of Parliament, ruling parties and opposition representatives told Dnevnik.

The bill, which was passed at first reading yesterday, also sparked strong criticism from businesses, which slammed it for its far-fetched macroeconomic framework and patchy measures against the impact of the global financial crisis.

Prime Minister Sergei Stanishev hinted the draft may be revised between the two readings saying “no reasonable proposals should be rejected”.

To tackle the aftermath of the global financial fallout, the Government will increase spending on infrastructure, social activities, education and healthcare to BGN 5.2 billion, which is 20% more than this year.

Oppositional MPs pushed lower tax and social security burdens to leave more cash with taxpayers.

DSB leader and former prime minister Ivan Kostov said Bulgaria is breaking ranks with other European countries fighting the fallout with budget surplus instead of deficit and tax breaks.

Thus the burden is shifted to the state so that individuals and companies can focus on economic activity, Kostov explained.

Instead of pouring cash into unreformed institutions, the Government would do much better leaving it with households and businesses by reducing taxation rate or scrapping dividend tax, said macroeconomists Lachezar Bogdanov of Industry Watch and Georgi Angelov of Open Society Institute.

Mr Stanishev dismissed both proposals of the opposition saying that the surplus remains an important anchor of stability for the state, the currency board and the local currency exchange rate.

Martin Dimitrov of UDF accused the governors of loosening the purse strings with elections coming next year.

Both the prime minister and political formations said the BGN 32 billion budget revenue target would be very hard to hit.

(Dnevnik)

Clouds thickened over the tenders for a fourth and a fifth GSM operator in Bulgaria as experts, prospect bidders and even sources of the regulator said the niche is too tight.

The tender the commission called in July fell through, and the current procedures are only drawing feeble interest.

Market sources say buyers are put off by the inflated prices of an indicative BGN 38 million for the thinner and BGN 57 million for the broader resource.

For comparison, Vivatel paid BGN 54 million for a chunk on the spectrum four years ago.

The regulator’s chairman, Veselin Bojkov, said the idicative prices were based on the old tarrif dating back to 1998 although the inflation has spiralled more than 90% ever since.

In November the watchdog raised the tariff to BGN 100,000 per megahertz.

Experts say the CPC cannot overlook the tariff but it may also consider other factors and propose a lower price to the Government.

Sources told Dnevnik the commission missed this opportunity intentionally over clashes between members.

The operators which gave up the fight said the manouvering is meant to defend the interests of those already on the market.

„The higher prices are a sign that the commission has erroneosly analysed the market and is intentionally playing on someone’s side,” an unnamed expert commented.

„It’s unclear why the regulator is pushing for a fourth and a fifth operator, but there is definitely no market niche for a new player,’ said Vivatel.

Epsilon Construction and Globul are considered to be the two serious candidates of the handful which bought tender papers.

(Dnevnik)

Burgasgas, a unit of local gas supplier Overgas Inc., will pump BGN 10 million into its gas distribution grid next year, said executive director Zlatin Dimov.

The company will add to the grid Black Sea towns of Nesebar and Sunny Beach, and continue to deply gas mains in Aitos and Karnobat.

The gasification of all municipal buildings in Karnobat should be wrapped up by the end of the year.

Burgasgas, which was registered in early November, bundles the local gas distributors in Stara Zagora, Nova Zagora, Yambol and Burgas. Zlatin Dimov is a former executive director of the Burgas company.

The merger was aimed at streamlining work processes, economy of scale, lower cost of service and better price for customers in southeastern Bulgaria, said Dimov.

(Dnevnik)

The Bulgarian government may have fretted over the fate of troubled steel mill in the heat of the global economic crisis, but now there are five offers on the table, said deputy economy and energy minister Nina Radeva.

Candidates have expressed interest in supplying raw materials, signing a tolling agreement or operating the plant. Some of them wrote straight to Prime Minister Sergei Stanishev.

The prospective suitors are Ukrainian Smart Group of billionaire Rinat Akhmetov, a tie-up between Czech investment company ML Moran and consultancy A.T.Kearney, Valentin Zahariev, who owns local lead and zinc smelter OCK, Russian company Prominvest and a raw material supplier which wished to be unnamed.

Talks are most advanced with the Ukrainian canidate and the consortium.

Late on Tuesday Smart Group offered in a letter addressed to Mr Stanishev to help the state draw up a rescue plan for Kremikovtzi, restructure the plant’s debts, coordinate investment and social committments and sort out ecological and licencing issues.

ML Moran and A.T.Kearney directors arrived in Bulgaria yesterday to meet with Mr Stanishev.

ML Moran has helped bring back on track Czech company Vitkovic and sell it to Russia’s Evraz, one of the world’s steel and mining majors.

The tie-in says a business strategy should be drafted to resume operations at the mill. The company’s debts should be restructured and and a revolving credit line should be given for operating cash.

Prominvest and the unnamed candidate are willing to supply raw materials to the mill.

Valentin Zahariev’s offer has not been revealed to the public yet, and he has not been invited to talks either.

A ministry source speaking on condition of anonymity said Economy Minister Petar Dimitrov has spoken to prospective Brazilian suitors during his visit to Latin America.

(Dnevnik)

The food sector is shaping up as one of the industries which might escape with minor injuries from the global financial fallout and the stagnation it spawned, said exhibitors at the fifth Meatmania, the World of Milk, Bulpek, Salon de Vin, and Interfood and Drink trade shows, which opened in Sofia yesterday.

„In times of crisis people are buying fewer homes, furniture and household appliances but are stepping up food consumption. Therefore most companies of the industry are not expecting slowdown,” said Kostadin Chorbadjiiski, chairman of the local association of meet processing firms.

„We expected some 30% rise in meat products sales in spite of the summer price increase,” said Yordan Babukchiev, chief technologist of Ruse-based pig breeder Golyamo Vranevo Invest, one of a handful of companies with a full production cycle.

Wine and dairy company managers were mixed in their forecasts for the year.

Mihail Tachev, who chairs the Association of Dairy Processors in Bulgaria and owns local dairy farm Old Liben, ruled out any sharp decline in sales.

But Kondov Ecoproduction owner Ognyan Kondov said sales of some luxury cheeses may drop by up to 25%.

Big exporters are also bracing for a tough year.

Cheese exports will fall to 800,000-900,000 tonnes from some 1,500 tonnes last year, said LB Bulgaricum executive director Hristo Yungarev, and added the company will not curtail investment plans despite the crisis. It is completing two blue vein and spread cheese projects.

The major challenges before the industry is the absence of a state policy and the scanty raw material supply, according to Tachev.

Winemakes, which sell almost 80% of their produce abroad, are facing a 20% drop in exports for 2008 due to the stagnated Russian market, said National Vine and Wine Chamber chairman Plamen Mollov.

(Dnevnik)

Bulgarian indices started on an uplift mood on Wednesday only to trim some of the gains at the end of trading.

SOFIX of the blue chips closed 4.5% higher at 337.09 points and Dnevnik 20 moved 3.27% into positive territory to 53.01 points.

Blue-chip construction materials distributor Toplivo, road builder Holding Patishta and power tools maker Sparky Eltos shot up by over 10%.

Trade turnover was in excess of BGN 32 million, and fuel distributor Petrol generated the bulk of it.

The high volatility we have seen in the past days very much reflects the low liquidity on the market, said Nadya Nedelcheva, portfolio manager at Karoll Capital Management.

There are more see-saw sessions on the horizon with markets still under severe stress.

The broader BG40 bucked the trend adding a humble less than a percentage.

BGREIT, which gauges the performance of property funds, was the only one to close in the red at 48.14 points.

Investors snapped at shares of Corporate Commercial Bank, Doverie Obedinen Holding and insurer Euroins.

(Dnevnik)