Bulgarian Minister: Recession Ended Overdevelopment

Business | March 8, 2011, Tuesday // 13:59
Bulgaria: Bulgarian Minister: Recession Ended Overdevelopment Bulgaria's Minister on Regional Development Rosen Plevneliev. Photo by BGNES

The crisis in the construction sector has stopped the overdevelopment in the country, according to Bulgaria's Minister on Regional Development, Rosen Plevneliev.

He talked at the 11th edition of the international specialized exhibition "Bulgaria Building Week", which features 310 Bulgarian and international companies this year.

Plevneliev said that 1270 companies were dropped out of the construction register, but in his words, these were random players. He added that there are 590 newly registered companies, mostly small ones, which are looking for market niches in energy efficiency and quality construction.

The minister presented the latest data by the EU's statistical office Eurostat, according to which Bulgaria ranks 22nd out of the 27 EU member states with its decline by 7.7% in the construction industry.

The biggest drop was registered in Spain – 27%. Portugal, Slovenia and Latvia have also registered bigger decreases than Bulgaria – 13%, 11% and 9%, respectively.

According to the minister, the data is worrying in terms of the volume – the construction in Bulgaria decreased from BGN 21 B in 2008 to BGN 12 B in 2010. However, he noted that the volume was at the expense of the improved quality.

"The numbers are what they are, but there are trends behind them. The quality of provided materials and the technologies are much better. Bulgaria has said goodbye to the fast construction and to the idea that construction is a driver of the economy and the growth," he said.

Plevneliev pointed out BGN 21 B were spent on construction of apartments and office buildings in 2009, but now the growth in the sector comes from infrastructure.

"I am somewhat thankful for the recession because otherwise we would have constructed a second Bansko winter resort and a second Sunny Beach summer resort, without having the proper infrastructure. The crisis has taught us and has changed us," he said.

The minister stated that 2011 will not be easy for the construction industry because it is the first to enter the recession and the last to come out of it.

However, Plevneliev said that future projects and investments for 2013-2020 are developing now. He noted that by 2020, every new house in Bulgaria has to be low energy or passive.

"What other countries have done for 40 years we have to do for 10. This dramatic transformation is ahead of us and it has to be completed," the minister said.

Meanwhile, the Bulgarian National Statistics Institute announced that the negative tendency in the construction sector from 2010 is continuing. In January 2011, the sector registered a 12.4% drop, compared to the same month in 2010.

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Tags: Rosen Plevneliev, construction, construction industry, overbuilding, recession, National Statistics Institute
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