Bulgaria's Construction Sector: Notable Decline Surpasses EU Trends
Recent data from Eurostat unveils a significant downturn in Bulgaria's construction industry, showcasing a more pronounced dip compared to the EU's overall production metrics
A spot check of construction work on the Lyulin highway established that less than one fifth of the workers claimed by the contractor to be working, were actually on-site.
Government ministry officials, accompanied by the media, traveled on Friday along a 7 km stretch of the highway on the periphery of Sofia without seeing a single worker. At one point, they encountered a group of eight workers involved in laying shuttering for one of the bridges.
The Transport Ministry, which extended its tour of inspection, later announced they had counted a total of 130 persons. The contractor, Turkish company Mapa Cengiz had, however, declared there were more than 1 000 workers at the site.
Ivailo Moskovski, Deputy Minister of Transport defined the activity on construction of the highway as extremely unsatisfactory. The project is scheduled to be completed by October 13, 2010, but only some 6 kms of roadway of the total 19 have been completed; after that, work is focused on building bridges and complex interchanges.
The entire highway project includes the construction of three tunnels with a total length of 1,26 kms, 26 bridges and viaducts with a total length of 6 kms, 3 junctions and supporting walls with length of over 2,5 kms.
"We can not sanction Mapa Cengiz in the process of work, but only after the expiry of the contract and if the conditions in it have been violated," said Moscovski. He did not explain why the state had signed a contract in which its interests might not be protected, and where the failure of the contractor would require the state to return money to the European Commission.
The value of the project for construction of the highway is EUR 148,5 M, of which EUR 111,4 M has been provided by the ISPA program. To date, the contractor has spent one third of the total budget.
The European Commission had frozen those funds after a corruption scandal involving the former head of the Agency "Road Infrastructure", the contracting authority.
Following requests and assurances from the Bulgarian side that the project would be implemented according to EU rules, Brussels had unfrozen the money. The highway, however, remains on the list of risky projects under ISPA, which will terminate at the end of 2010.
The worst scenario if the project was not completed on time, explained Moskovski, would mean the Bulgarian state having to return the EU funds. There were more favorable options, but these would need to be negotiated with the European Commission. These could include an extension to the EU program, although this is without precedent.
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