Legal Issues - Public Procurement

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The assignment of public procurement contracts without tenders to be limited
The assignment of public procurement contracts without tenders to be limited

01.06.2011
Source: klassa.bg

“The assignment of public procurement contracts without tenders, to state and municipal-owned companies will be almost entirely limited,” said Traicho Traikov, Minister of Economy, Energy and Tourism on the occasion of the approved by the Government amendments to the Public Procurement Law. According to the new law provisions, the so-called direct assignment of contracts will be applied only for contracts for public services. Only state and municipal-owned companies, whose annual turnover is based entirely on orders of the owning institutions, will be entitled to carry out such services.

A more flexible order for the introduction of changes in public procurement procedures has been set up. It is envisaged that the contracting entities will be allowed to change once the stated conditions, within 14 days after initiating the procedure. The goal is for errors and omissions to be eliminated easily. This will save time and prevent unnecessary appeals.

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EU Climate Change Commissioner Taps Bulgaria's Back
EU Climate Change Commissioner Taps Bulgaria's Back

16.05.2011
Source: hbcbg.com

EU Commissioner for Climate Action Connie Hedegaard has commended the Bulgarian government for its zeal in fulfilling the EU 2020 carbon output reduction targets.

Hedegaard met in Sofia Friday with PM Boyko Borisov and Environmental Minister Nona Karadzhova to discuss with Karadzhova the bloc's roadmap for moving to a competitive low-carbon economy in 2050.

The roadmap has the ong-term target of reducing domestic emissions by 80 to 95% by mid-century. It tackles the sectors responsible for Europe's emissions - power generation, industry, transport, buildings and construction, as well as agriculture.

"The money that the Bulgarian government will be generating through the sale of carbon quotas will be directly invested in energy efficiency and rehabilitation of buildings," Bulgarian Prime Minister Boyko Borisov told journalists during his joint news conference with EU Climate Action Commissioner Hedegaard, referring to the so called refurbishment of the public and residential panel construction buildings erected all over Bulgaria during the communist period.

Borisov declared that Bulgaria is meeting the EU carbon reduction goals "with ease", and stressed that even other major economies such as China are already starting projects to reduce their carbon emissions.

"It may be slower than we Europeans would wish but I hope that in the years to come Europe will achieve better success in its greenhouse gas emission talks with the other big economies," the PM stated.

Commissioner Hedegaard did express her satisfaction with the fact that the Bulgarian government is stressing energy efficiency and is working on a draft law on climate.

She pointed out that the EU policies for improving the member states' energy efficiency does not encompass only better efficiency and energy savings but also seeks to provide for increasing the Union's energy independence from Russia and the Middle East.

"Your thinking is in harmony with the EC plans," Hedegaard told the Bulgarian government praising it for actually surpassing the expected 20% reduction.

In her words, if the EU emphasizes energy efficiency, its carbon output can be reduced by 25% by 2020.

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Bulgarian economy most dependent on public services
Bulgarian economy most dependent on public services

03.04.2011
Source: klassa.bg

 

“Bulgaria ranks first in the European Union in terms of the ratio services of general interest (SGI) to gross domestic product (GDP). In Bulgaria, this ratio is 36%, while it is 26% on the average in the 27 EU member states, shows data from the last meeting of the Permanent Study Group on SGI within the European Economic and Social Committee (EESC), "said Dr. Milena Angelova, Vice President of the Employers’ Group within the EESC.

Countries such as Great Britain, Slovakia, and Hungary come after Bulgaria, while Greece and Romania are at the bottom of the ranking. “This figure indicates that the cost of public services that people receive in Bulgaria, accumulate greater part of the family budgets, which is not a good indicator, "said President of Bulgarian Industrial Capital Association, Vasil Velev for Klassa. “The ranking of our country is indicative for the relatively low competitiveness of the Bulgarian economy,” Velev added.

Public authorities are in charge of the services of general interest. These include non-market services such as education, social protection, judiciary and security. Some of the services are associated with the general economic interest - electricity, telecommunications, postal services, transport, water and sewage and waste transportation. SGIs are a key element of Europe's economy especially in times of crisis. The basic infrastructure networks – electrical power grids, gas pipelines, postal services, telecommunications, public transport, railways, water and sewage, etc.., invest huge amounts and operate with very big budgets. According to Eurostat data, their total share in the European economy exceeds €153 bn or 6.4%.

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Public procurement orders for construction activities to the amount of BGN 5 bn to be launched in 2011.
Public procurement orders for construction activities to the amount of BGN 5 bn to be launched in 2011.

23.09.2010
Source: class.bg

Advance payments under OPs could be restricted.

Public procurement orders for construction activities to the amount of BGN 3.5 bn will be launched in 2011. Municipalities will assign additional activities for another BGN 1.5 bn, announced Rosen Plevneliev, Minister of Regional Development, at the opening of the school year at the University of Architecture, Civil Engineering and Geodesy yesterday. These are funds provided under the Operational Programs (OPs) managed by the Ministry of Environment and Water, the Ministry of Regional Development and Public Works, and the Ministry of Transport.


"Out of 13 policies for which we are in charge, we will not be able to implement any measures under 11 of these because of the lack of funds. We have at our disposal BGN 5.5 mln allocated for the water sector and more than BGN 1 mln for landslides reinforcements, etc." explained Plevneliev. However, he made it clear that the drafting of quality projects is one of his main goals.


Between BGN 590 mln and 900 mln will be needed for all payments, under concluded and planned contracts under the Operational Programme Regional Development in the next year, showed estimates of the Ministry. "The higher planned amount will be necessary if all beneficiaries receive the maximum advance payments of up to 35% of the contract value," explained Plevneliev. In his opinion, the amount of BGN 590 mln, set in the budget by the Ministry of Finance for next year, will be enough if advance payments to the beneficiaries remain at their current levels of around 5-10%. The possibility that some contractors will obtain up to 35% of the value of the contracts in advance is not excluded but their number will be limited.

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Public procurement orders for construction activities to the amount of BGN 5 bn to be launched in 2011
Public procurement orders for construction activities to the amount of BGN 5 bn to be launched in 2011

21.09.2010
Source: class.bg

Advance paymentsunder OPs could be restricted.

 

Public procurement orders for construction activities to the amount of BGN 3.5 bn will be launched in 2011. Municipalities will assign additional activities for another BGN 1.5 bn , announced Rosen Plevneliev, Minister of Regional Development, at the opening of the school year at the University of Architecture, Civil Engineering and Geodesy yesterday. These are funds provided under the Operational Programs (OPs) managed by the Ministry of Environment and Water, The Ministry of Regional Development and Public Works, and the Ministry of Transport.

 

"Out of 13 policies for which we are in charge, we will not be able to implement any measures under 11 of these because of the lack of funds. We have at our disposal BGN 5.5 mln allocated for the water sector and more than BGN 1 mln for landslides reinforcements, etc." explained Plevneliev. However, he made it clear that the drafting of quality projects is one of his main goals.

 

Between BGN 590 mln and 900 mln are needed for all payments, concluded and planned contracts under the Operational Programme Regional Development in the next year, showed estimates of the Ministry. "The higher planned amount will be needed if all beneficiaries receive the maximum advance payments of up to 35% of the contract value," explained Plevneliev. In his opinion, the amount of BGN 590 mln, set in the budget by the Ministry of Finance for next year, will be enough if advance payments to the beneficiaries remain at their current levels of around 5-10%. The possibility that some contractors will obtain up to 35% of the value of the contracts in advance is not excluded but their number will be limited.

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European Commission warns us over public procurement contracts
European Commission warns us over public procurement contracts

25.06.2010
Source: class.bg

European Commission (EC) delivered a second and final warning to Bulgaria over its failure to comply with European legislation in the fields of environment, public procurement contracts and the energy market, announced the Bulgarian National Radio (BNR).

EC experts have established that our country does not apply fully the Public Procurement Remedies Directive. Directive 2007/66/EC stipulates a mandatory waiting period of at least 10 days between the assigning of the procurement order and the actual signing of the contract.


Meanwhile, yesterday, the Bulgarian Parliament endorsed the second reading amendments to the Public Procurement Act. The MPs decided that public service contracts should be awarded for a period of up to 5 years and, in special cases, for up to 10 years in providing bank loans for investment projects or EU projects.

The other penal procedure on the part of the EC refers to the non-application of the legislation on the common energy market. The Commission reckons that Bulgaria has not opened up sufficiently its gas and electricity market.


The third procedure is under the EU Floods Directive and is aimed at reducing the risk to people and the environment.

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Kamen Kolev, Deputy Chairman of BIA: Businesses oppose the 7% reduction in money to be remitted to companies for fulfilled public procurement orders
Kamen Kolev, Deputy Chairman of BIA: Businesses oppose the 7% reduction in money to be remitted to companies for fulfilled public procurement orders

21.04.2010
Source: class.bg

Mr. Kolev, according to BIA (Bulgarian Industrial Association) data, the structure of Bulgarian exports is changing. Which sectors of the economy have advanced in this respect and which are lagging behind?


- In January and February 2010, Bulgaria registered a 10% increase in exports on average, compared to the same months of 2009. This growth was due to trade in non-ferrous metals. On the one hand, this can be explained by the higher prices of some export-defining commodity groups. For instance, the price of unrefined copper, which is a top commodity on Bulgaria’s export list, exceeded $6,000 per tonne. During the best years, 2007-2008, this commodity was selling at $8,000/tonne and then its price fell to $3,300/ tonne. Thus, the favourable market situation has led to an increase in the price value of Bulgarian exports. Our country also exports mineral oils, mainly produced by Neftochim, and a 60% growth in these exports was reported. The pharmaceutical industry was hardly affected by the crisis and it is developing very well. The sector registered 50% growth in January and February. The production of electric machines also rose by 50% and that of footwear – by 40%. On the other hand, a decrease in the manufacturing of garments and ferrous metals was also registered.



In this case, isn’t it too optimistic to expect economic growth of 1% by the end of 2010, as predicted?


- At present, exports are expected to speed up recovery from the crisis. The results for the first quarter of this year are not ready yet but I guess that the decline will be about 3% of GDP on an annual basis. According to the forecasts, the pace of decline in GDP is expected to slow down and it is possible to achieve 0% or 1% growth at the end of 2010.



In our previous conversation, you predicted that our economy will maintain close-to-zero growth for at least two or three years. Are you still of the same opinion?


- The economy will not recover quickly despite the positive effect of exports. It will be fluctuating around zero for at least two or three years. This is the so-called depression period.



Which sectors will manage to recover from the stagnation over this period and which will continue to incur losses?


- Construction registered a 30% drop on an annual basis and we could say that the crisis in the sector came late. It was primarily manifested in a decrease in orders and difficult access to financing. If we accept that the crisis hit Bulgaria in October 2008, it was felt in the construction sector in the summer of 2009 and the biggest decline in the sector is now. Another explanation is that the boom in this industry was exceptionally large and it is just logical to have a drastic decrease now.



Which of the anti-crisis measures, approved by the National Council for Tripartite Cooperation are the priority and will have the quickest effect?


- Most of the measures are aimed at filling the BGN 1.5 bn budget gap and it is not clear whether this gap will not become greater by the end of the year. These include the sale of emission quotas, the privatisation of state-owned companies, and the sale or leasing of state-owned plots of land. The problem is that most of these proceeds cannot be used to fill the budget gap, that is, they cannot be spent for current expenses incurred by the Government. Anyway, they could compensate for some expenditures paid for with budget money. For example, the sale of emission quotas will replace co-financing from the budget under operational programmes or some ecological projects. Divestment of state-owned enterprises should not be delayed although their prices are not high now at a time of crisis. And some of the measures are intended to improve the business climate.



These 60 measures were in fact discussed as an alternative to replace the most direct and most tempting option – that of raising taxes. They are an attempt to avoid increasing the VAT rate. The success of this attempt will depend on the set of tools for their implementation. For example, one of the measures was to pay off liabilities to businesses, estimated at some BGN 600 mln. The scheme proposed now is to remit 7% less of the amounts due. We did not reach such an agreement. Therefore, the National Council for Tripartite Cooperation will hold a meeting on Thursday to discuss this issue.



The scheme proposed is the following: businesses which want to get their money immediately will have to lose 7% of the amount - 5% of lost interest from the State deposit in the Bulgarian Investment Bank (BIB) and 2% for bank services. Otherwise, those who want to get the entire amount will have to wait until next year. At the meeting with Government and the syndicates, we will also discuss some social issues, such as the payment of sick leave.



Isn’t the list of anti-crisis measures too long?


- Of course, some of these are of minor importance and some are very general but the more important measures are aimed at filling the budget gap. The most important thing is to secure proceeds and the biggest temptation here is to raise VAT. Such a measure guarantees an immediate collection of funds. We should be considering whether the application of these measures will improve the business environment and to what extent they will compensate for the absence of regular revenues which could be accrued via increasing taxes.

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