Although more positive than previous evaluations, the European Commission’s latest report on Bulgaria’s judicial reform found that progress was only limited and confined to the technical level, while the main problem -- the lack of political commitment to fight against corruption and organised crime -- still remains.

Brussels highlights the fact that its relations with Sofia have improved over the past year and Bulgarian authorities no longer deny the widespread existence of organised crime and corruption. Ties between the Stanishev Cabinet and the Commission were srained before last year’s report.

One positive step identified by the new report is the setting up of joint teams between the prosecution, police, the National Investigation Service and the State Agency of National Security regarding investigations in particular into EU fraud demonstrated by the growing number of investigations and indictments. The Commission also applauded the efforts of the Supreme Court of Cassation as well as the creation of a central website to signal corruption offences.

The track record of Bulgarian Commission for freezing and confiscation of criminal assets (CEPACA) has improved significantly since mid 2008, but assets continue to be frozen only several months into the pre-trial phase or at the time of indictment. The MPs of the former parlimanet, who were generally criticised, got a pat on the shoulder for increasing the number of indictments on EU funds fraud and taking action to avoid abuses of defendants' rights including ordinance on sick leave.

However, the report concludes that “despite some encouraging pragmatic steps to render the judiciary more efficient and to address more actively the fight against corruption and organised crime, there are many shortcomings which need to be urgently addressed by the Bulgarian Government,” noting that “the measures taken are seen as piece-meal and as not systematically followed up at all levels.”

The Commission identifies the absence of political commitment as the biggest stumbling block before the necessary reforms and argues there is no clear evidence that the government is committed to “eradicating the root-causes of the problem.”

The Commission points out that the administration, police and the judiciary could not be expected to fight against corruption and crime given the signals coming from the political leadership.

“This lack of support causes law enforcement personnel to feel insecure about starting an investigation, in case it threatens to expose high level corruption,” according to the report.

The Commission warns that whatever successes are observed, they should be judged against persisting killings linked with organised crime and the fact that known criminals are not apprehended.

(Dnevnik)

Water utility Yovkovtsi, which operates the waste water treatment facility in Bulgaria’s northern municipalities of Gorna Oryahovitsa and Lyaskovets, has developed two co-generation units, each rated at 142 KW.

The energy watchdog, the State Energy and Water Regulatory Commission (SEWRC), has already considered the company’s application to determine the tariffs at which it will supply electricity to E.ON Bulgaria, the local unit of the German mega-utility. It should come up with a decision at its Monday session.

The two facilities now run at 50% of their nameplate capacity. The company’s chief energy expert, Danail Tsvetanov, said that they need 50 cubic metres of gas per hour to operate at 75% of their capacity, adding that the co-generation cost is factored in the proposed prices. The company uses the produced thermal energy to meet its own needs.

Last year the local governments of Gorna Oryahovitsa and Lyaskovets transferred the management of the treatment plant to the water utility for a three-year period.

The power produced from co-generated capacities comes with higher prices, which is based on 80% of the average selling price for power distributors. Yovkovtsi has request a tariff of BGN 132 per MWh. For comparison, power from small-scale hydropower plants of up to 10 MW is priced BGN 105 and wind power between BGN 172 and BGN 189. Solar power has the biggest price tag of BGN 755 to BGN 823 per MWh.

(Dnevnik)

Bulgarian energy tycoon Hristo Kovachki is interested in the sell-off for the insolvent heating utility in the western town of Pernik, reported state-run news agency BTA, quoting a company source.

The state-controlled Toplofikatsia Pernik was declared insolvent by the district court at the end of April, with a debt pile of more than BGN 140 million. The privatisation has attracted local company Ventsislav Yordanov – Nadezhda, which has a contract with former state-run mine Pernik to transport coal for the utility and Steam Trading. Yordanov has sold his BGN 70 million receivables to local company Bovi Tour.

Kovachki’s press office was tight-lipped about the matter.

“In its current shape Toplofikatsia Pernik is doomed to shutdown. The only way out is a larger thermal workload,” Kovachki told BTA. He proposes that a 23-kilometre heating system should be deployed to link Republika combined heat and power plant and the Bulgarian capital. The project cost is estimated at around BGN 10 million.

The Pernik utility has a USD 7 million loan with the World Bank to revamp its fifth generator. Its tariffs, set by the State Energy and Water Regulatory Commission (SEWRC) below their cost price, are heaping more financial pressure on the company.

A month after promulgation of the insolvency ruling by the Pernik District Court, the company’s creditors will vote on a rescue plan. Its court-appointed receiver Dimitar Bogdanov told Dnevnik that one of the proposals might be expansion of production area.

(Dnevnik)

In a bid to beef up security amidst the global recession, Bulgarian banks have started to pack up on the fast loan market of funding given on the spot at retailers, market insiders told Dnevnik.

While they still keep their stands in supermarkets and other big-box outlets, lenders have tighten the criteria for eligible borrowers and squeezed funding volumes. A check of Dnevnik found stands of United Bulgarian Bank (UBB), Postbank and First Investment Bank (FIB). But most banks have curtailed loans for the purchase of small goods or cash loans, which bear the same service costs as a BGN 200,000 loan. They have decided to focus on more profitable assets with a particular stress on mortgage and corporate loans. Postbank is seeing the reverse trend, having received more fast loan applications since and lifted their share in its total portfolio since the start of the year. This followed a drop in late 2008 and early 2009 when banks reduced lending in all segments.

But quick lending continued full steam ahead at non-banking financial institutions, with three more players prepping to set foot on the Bulgarian market.

Fast loan started to gain momentum in Bulgaria a couple of years ago when the economic boom, rising income and falling loan prices sparked stiff competition in a lucrative and consumer credit segment. But the crisis cooled off the enthusiasm and now loan defaults are creeping up. The share of overdue consumer loans soared to 6.4% of all in the segment in May from 4% a year earlier and 4.7% in December. Bad loans in the non-banking segment stood at 9.6% at the end of March against 4.2% a year earlier and 6.9% at the end of December.

(Dnevnik)

Hopes for a modest uptick on the Bulgarian Stock Exchange (BSE) were destroyed by a new drop in a sizeable turnover of more than BGN 2 million, where almost BGN 1.6 million came from a single position.

Hefty volumes catapulted Sofia-based retailer Serdicom, one of the illiquid companies on the Bulgarian bourse, by 150%.

Most indices traded higher in the early hours but widespread falls dragged down SOFIX, BG40 and BGTR30 of the stocks with the highest market capitalisation and liquidity. The blue-chip and the broader indices shed over 1% to finish at 350.06 points and 98.49 points, respectively. BGTR30 dodged a deeper loss, ending 0.23% lower at 264.95 points. Dnevnik 20 of the biggest and most liquid stocks ticked up 0.04% to 52.8 points.

Corporate Commercial Bank (Corpbank) gave up Wednesday’s solid rally, tumbling 10% to BGN 52.05 apiece. On the whole, higher volumes came with modest gains, which saw aluminium producer Alcomet, First Investment Bank (FIB) and water bottler Devin all up by 0.87% and Central Cooperative Bank (CCB) up 1.6%. Bulgarian American Credit Bank added almost 1% to go back to BGN 11.30.

Investors picked four property funds, which propelled forward the industry index BGREIT by more than 1% to 40.66 points. Among the biggest risers, Elana Agricultural Land Opportunity Fund and Park REIT shot up 7.14% and 9.5%, respectively.

(Dnevnik)