Dnevnik 16 December 2009

Bulgaria’s builders shift from housing to road projects


Large-scale companies that flocked to build holiday and golf projects in Bulgaria are now gunning for the upcoming Trakiya motorway tender and are in talks to snap up road builders.

A poll of Dnevnik to gauge interest for the tender showed that construction companies are ditching holiday, residential and golf complexes, shirting their focus to highways and roads. The change of focus is prompted by the reallocation of cash pots provided under the EU’s operational programmes. Thus, the EUR 1 billion lined up to develop Bulgaria’s threadbare road infrastructure seem a lucrative bite as housing construction and tourism are down in the dumps.

We have been developing our road business for the past seven or eight months, Nikolay Galchev, owned of Galchev Engineering Group, told Dnevnik. The company built a name thanks to a spate of holiday properties it scattered on the Black Sea coast and the upscale mountain resort of Bansko.

He added the company has vied in six tenders under the Transit Roads V programme for the repair of some 1.535 kilometres of road network.

Galchev is holding negotiations to team up or acquire a number of road companies, he said, without elaborating.

The firm has purchased papers for the Trakiya tender but has not yet made up its mind on whether it will submit an offer, nor has it chosen a partner.

Balkanstroy, a local company that has developed a golf project in Razlog as well as a raft of housing and holiday properties nationwide, will bid in the tender, said manager Nikolay Kaloyanov, but did not name its partner.

“Our colleagues from the high-construction sector are eyeing highway projects. While we respect their experience, we think that have no experience in road construction,” said Roumen Yovchev, chairman of the Roads industry chamber and executive director of Moststroy, parting of Holding Roads. He announced he would propose more stringent criteria for companies eligible for first- and second-category building projects, which include infrastructure development.

The Bulgarian companies that raced in last year’s suspended tenders for the highway will be back to the game. Holding Roads, Glavbolgarstroy, Avtomagistrali-Tcherno More and Trace Group will tie up with other local firms to fulfill the tough criteria.

Some of the foreign companies that bid last year are also coming back.

Some 60 companies have so far purchased documents to build the section linking Stara Zagora and Nova Zagora with a projected cost of EUR 96 million. Bids can be submitted by January 12.