Bulgaria Lacks Capacity to Control Concession Agreements - Expert

Business | August 5, 2013, Monday // 12:45|  views

Economic expert Evgenii Kanev has suggested that Bulgaria lacks the resources to monitor the implementation of concession contracts.

"The state has no capacity to control the concession contracts and it obviously did a poor job of the Oranovo mining concession. The large number of tragic incidents at the mine prove this," economist Evgenii Kanev said Monday in an interview for the morning broadcast of the Bulgaria on Air TV station.

Kanev, as cited by investor.bg, explained that in the case of the Oranovo mine, the contract relations were complex because there were also private properties on the site.

The irregularities in the Oranovo mining concession were exposed by Economy and Energy Minister Dragomir Stoynev after a tragic incident claimed the lives of four miners.

Stoynev made clear Friday that the concession contract for the Oranovo mine had been stopped until the owner brought the operations in line with the statutory requirements.

In his Monday interview, Kanev informed that Bulgaria had signed around 680 concession contracts, adding that only 10 of them had been signed with foreign investors.

"It is believed that it is precisely them who have the necessary experience to govern 35-year concession agreements. The financial requirements for such contracts are not as big a problem as the lack of managerial capacity," he added.

Kanev insisted that Bulgaria lacked experts to monitor and control post-privatization deals and the implementation of concession contracts.

"Control is implemented on the basis of reports prepared by the concessionaire. Inspections are often conducted as a pure formality as regards the observance of certain provisions of the contract. There is no on-site monitoring and control on site. There are no teams at the respective ministries. The question is whether the government is interested in applying the good practices of other countries in the sphere of control," he pointed out.

He claimed that it was not difficult to build expert capacity because it was a matter of political will.

The economic expert called for centralized control over concession agreements, stressing that it would provide better quality and efficiency at lower costs.

"There are very good reports, recommendations and strategies but they remain on paper only. Every new government drafts new procedures and then it starts all over again. This places a burden on the administration and just when it has come to terms with the concrete measures, a new government comes to power and everything changes," he added.

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Tags: concession, concessionaire, Dragomir Stoynev, Oranovo, mine, mining industry


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