Qatar Demands High Returns to Fund Bulgaria's Black Sea Highway

Business | March 16, 2012, Friday // 19:21|  views

Bulgaria's Regional Development Minister Pavlova (right) with Transport Minister Moskovski. Photo by BGNES

Qatar's government has asked for a minimum of 14% return on investment (ROI) in order to participate in the funding of Bulgaria's Black Sea coast highway, the Cherno More Highway, a Bulgarian minister announced.

Qatar's tough conditions for becoming involved in the Cherno More Highway project that is supposed to link the major Bulgarian Black Sea cities Varna and Burgas were made clear Friday by Regional Development and Public Works Minister Lilyana Pavlova, a day after a high-profile Bulgarian delegation led by PM Boyko Borisov came back from a visit to the Gulf nation.

Bulgaria has offered Qatar to join the construction of the Black Sea highway through a public private partnership since the European Commission has not agreed to provide EU funding for project as it is not considered an international road, Pavlova explained on Friday after handing out EU funding checks for flood prevention to several Bulgarian municipalities, as cited by BTA.

"Depending on the feasibility study, the road will be either a highway, or a high-speed road," the minister said.

She did reveal her concerns that the Cherno More Highway might not be able to achieve the 14% ROI demanded by Qatar but said that Qatar's participation in the project is yet to be negotiated.

Pavlova explained it is yet to be estimated what investment is needed for the construction of the coastal highway, what returns can be generated, and whether it can even be offered on a concession.

She did express her hopes, however, that the Bulgarian Parliament will adopt the new Public-Private Partnership Act in order to lay the foundations for such investments.

When asked if the Bulgarian government might seek a low-interest loan from Qatar for the Black Sea road if the Arab nation steers clear of a concession, Pavlova said Bulgaria and Qatar are talking about the latter joining as an investor generating returns, rather than as a creditor.

The Cherno More Highway, which is supposed to run parallel to the Black Sea coast linking the cities of Varna and Burgas, is to have an estimated length of 103 km. 10 km of those were built before 1980, and none have been completed ever since.

The Bulgarian government has hoped to pass the Black Sea highway project before Brussels as an extention of the southern Trakiya Highway in order to build it with EU funding.

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Tags: concessionaire, concession, FDI, Foreign investors, foreign investor, foreign investment, Public-Private Partnership Act, public-private partnership, Regional Development Minister, Lilyana Pavlova, Cherno More Highway, Black Sea Highway, highways, highway, ROI, Return on investment, Qatar, EC, EU, EU funding, EU funds, European Commission


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