The gas supply and transit contracts signed with Russian Gazprom in 2006 are against Bulgaria’s interests and face consumers with shock price hikes, showed a supplemental agreement to the contract for supply of natural gas to Bulgaria and the memorandum for further development of Russian-Bulgarian cooperation in the gas sector obtained by Dnevnik daily.

The documents are posted on the website of Capital weekly at capital.bg. The newspaper is expecting the Ministry of Economy and Energy, the State Energy and Water Regulatory Commission and gas company Bulgargaz to say whether the documents are authentic.

Under the new contracts, Bulgaria is to increase each year by a set agenda the price of natural gas for the domestic market received as a transit fee from the transfer to Turkey, Greece and Macedonia. The contracts, signed by Bulgargas and its partners Overgas Inc. (a Gazprom subsidiary) for supplies and Gazprom Export for transit, say that the gas from transit fees should cover about half of domestic consumption. This can explain why the rising price is having such an enormous effect on Bulgargas’s average sell price.

Depending on the supplier, the 2008 price ranges from USD 383.18 per 1,000 cu m (for Overgas Inc.) to USD 415.87 under the contract with WIEE-ZUG.

The price is increased semi-annually and was set at 60% of the market price for July 2008 and 82.5% for January 2009. It should catch up with the price of normal supplies by 2013.

The documents also change the payment scheme for the transit fee.

The burden is to be shouldered by Bulgarian industrial companies because exporting steel, ferrous metals, mining and pharmaceutical firms will become less competitive, business representatives said.

Instead of making energy supply prices foreseeable, the long-term contracts brought frequent price increases and an upcoming hike of over 25%.

Companies cannot plan their expenses even for a quarter ahead and households are left without adequate social protection, employers said.

Large consumers were warned about the price increase a year ago, former energy minister Rumen Ovcharov told the Bulgarian National Radio and shifted responsibility for the terms and conditions of the contracts to Bulgargaz Holding and Bulgargaz.

The price is based on the average price of heating oil and gas oil for the past nine months and the current level of the US dollar. Thus today’s gas price does not consider the sharp fall of oil but the strong dollar, said Bulgargas former executive director Vasil Filipov.

Overgas Inc. executive director Sasho Donchev, deputy economy and energy minister Valentin Ivanov, and Bulgargas Holding former CEO Lyubomir Denchev were not available to comment.

(Dnevnik)

French heavy duty vehicle manufacturer Renault Trucks picked Bulgaria to unveil its first representative office in Eastern Europe, the firm said in a press release.

The Volvo Group company topped the European market in terms of sales of vehicles of over 6 tons grabbing a 24.3% share for the five months of 2008.

Renault Trucks set foot in Bulgaria in May by the purchase of a truck service centre on Sofia’s Samokovsko Shose boulevard from Torino Motors Industrial Vehicles, one of the local Iveco dealers.

Further centre openings are due in Varna, Burgas and Plovdiv.

New truck sales in Bulgaria jumped by over 59% year-on-year to 2,718 units in the eight months to August 2008 as the European market slumped by 13% year-on-year to 21,021 units in August. Germany, the UK and Bulgaria were the only markets to enjoy increases.

(Dnevnik)

Bulgaria’s telecoms regulator CRC may invite tenders for two more GSM operating permits by the end of October, chairman Veselin Bojkov told Dnevnik daily.

Potential candidates can express interest by October 9.

This will be the commission’s second go at handing out idle frequencies after the July 29 procedure was cancelled for drawing a single bidder with bad paperwork.

Bidders said then they were put off by the high minimum bid for the 20-year licence set at BGN 38 million for 2x5 megahertz in the 1800 megahertz spectrum.

The regulator commented that prospective bidders would most probably bide their time until further vacant frequencies are auctioned.

Bidding will start at BGN 38 million for the new 10-year nationwide permit for two brands of 10 megahertz each. The bottom price of the two 15-megahertz bands is set at BGN 57 million.

The CRC explained that the price hinges on the fees it collects, and the duration of the permit is one of the components.

Aside of terrestrial GSM voice service, the winners will be able to offer datacasting, multimedia and broadband services based on new technologies and applications.

The remainder of the vacant 1800 megahertz spectrum will be distributed on demand to existing cellphone operators to expand, upgrade and develop their communication networks.

(Dnevnik)

The creditors of Bulgaria’s struggling steel mill Kremikovtzi elected Tsvetan Bankov and Ana Milenkova receivers for the plant after bondholders and the economy ministry drew near a joint action agreement.

But relations were soured again by disagreement over the appointment and the government’s refusal to accept a second receiver.

Friday saw fresh attempts at bridging the divide as the two parties met to talk on mobile phone instructions.

The ballots of four state-owned companies making more than four percent of the votes were declared void hinting at an orchestrated procedure aimed at securing the election of court-appointed receiver Ana Milenkova and barring private creditors from assuming full control over the plant.

Sources of the private creditors said India’s State Trading Corporation, Stemcor, Arcelor-Mittal and the plant’s majority owner, Finmetals Holding, joined votes against Rua Invest&Trade Inc of Ukrainian tycoon Konstantyn Zhevago, which allegedly got state support.

A source of the energy ministry said no conflict was meant and the appointment of Tsvetan Bankov and Ana Milenkova would hopefully defend the interests of all parties concerned.

According to the source, the receivers would launch court proceedings to terminate bad contracts inked after the plant was declared insolvent for many assets sold much cheaper than market prices.

(Dnevnik)

Last week’s trading brought new losses on the Bulgarian Stock Exchange after another major US lender was whisked off from the brink of failure.

Washington Mutual (WaMu), the biggest savings bank in the US and one of the symbols of mortgage creditors that sparked the subprime mortgage boom, was sold to JP Morgan for a meager USD 1.9 billion.

The new cataclysm sent capital markets for another dive with the key European indices losing some 2% Friday.

The BSE’s blue-chip SOFIX closed 3.34% lower and Dnevnik 20 of the biggest and most liquid companies was down by over 2%. The two indexes lost a respective 3.91% and 3.67% over the week.

Industrial Holding Bulgaria, Stara Planina Hold and insurer Bulstrad were the only three to hold ground in positive territory.

Bulgarian-American Credit Bank plummeted by over 14%. Eurohold Bulgaria and resort operator Albena also headed south.

“In the short term, the movement of the BSE indices will continue to be closely tied to what goes on in foreign markets,” said Severin Vartigov, portfolio manager at BenchMark Asset Management adding that local bourse players are gripped by uncertainty and fear that the global financial fallout may spill over to home.

The BSE’s main indexes have plunged over 60% since the start of the year, one of the worst performances in the world. They were at the other end of the scale last year, when SOFIX alone shot up 44%.

(Dnevnik)

The association of the Bulgarian cable operators will refer to the anti-trust regulator local TV channel bTV’s demands for charges and bundled transmission of its programmes, said executive director Magdalena Georgieva.

The regulator has not yet come up with a stance on the matter because it has not received complaints by cable operator owners or customers.

Georgieva commented that bTV is negotiating over new transmission fees and requirements in violation of good commercial practices and local anti-trust law.

The association reiterated its warning that on September 30 bTV will be unavailable at the homes of a large number of households. Last week the channel was dumped by a number of operators across the country with local broadcaster Skat taking up the channel’s evening talk show Slavi Trifonov’s Show and reality programme Survivor.

Bulgaria’s two biggest cable operators, Eurocom and Cabletel, have not signed contracts with bTV yet.

(Dnevnik)