Bulgaria's Radnevo Municipality Virtually Bankrupt

Business » FINANCE | August 18, 2014, Monday // 14:33
Bulgaria: Bulgaria's Radnevo Municipality Virtually Bankrupt Photo by Radnevo Municipality

The southern Bulgarian municipality of Radnevo is virtually bankrupt, according to the Mayor, Yulian Ilchev.

In a Monday interview for the Bulgarian National Radio, Ilchev said he expected urgent assistance from the caretaker government, adding that he had sent a letter to caretaker Prime Minister Georgi Bliznashki about the problem which Radnevo was facing.

Ilchev made clear that the difficulties were due to unpaid installments of BGN 4.4613 M of Bulgaria's National Electric Company (NEK) to state-owned company Maritsa Iztok Mines under a coal mining concession for the second half of 2013 and the first half of 2014.

He explained that the concession fee accounted for 54% of the budget of the Radnevo Municipality and it was to be paid before the coal mining company pays taxes, according to provisions of the Concessions Act and the Subsurface Resources Act.

Ilchev underscored that the only way for the municipality to avoid stopping current payments and salaries in the sphere of its social activities, education and healthcare was to take out loans.

He noted that the town of Galabovo was in similar condition.

Galabovo Mayor Nikolay Tonev stopped payments to companies providing services to the municipality over debts of BGN 1 M, or 25% of the amount of the municipal budget.

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Tags: Radnevo, Radnevo Municipality, National Electric Company, NEK, Maritsa Iztok mines, coal mining, concession
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