site.btaPresident Vetoes Privatization Act Amendments

Sofia, July 24 (BTA) - President Rumen Radev on Tuesday vetoed the Act Supplementing the Privatization and Post-Privatization Control Act, returning it for further consideration by the National Assembly, the President's press secretariat reported. The veto came after politicians described the revisions as lobbyist because they would allow the Domouschiev brothers, the majority owners of ship building and repair company Navibulgar, to avoid paying 58 million leva in penalties for undelivered commitments.

In his reasoning for the veto, President Radev said the new version of the law contains provisions which not only fail to protect the public interests but seriously harm them. The law will entail a review of privatization contracts to the detriment of the state and society, he warned.

One of the provisions reduces to five years the term for fulfilling specific obligations of the buyer under a privatization contract. The President argued that the timeframe for fulfilling the obligations under each privatization contract should be determined according to the type of business which has been privatized, rather than through legal provisions which create an advantage for the buyer at the expense of the public interests.

This new rule (and the option to reschedule obligations) will apply to privatization contracts which have already been signed as well as new contracts. Payment of indemnities will only be required for the first five years of the contract. This will benefit non-conforming buyers who have failed to pay indemnities for periods beyond those five years, Radev reasoned.

The law will, in effect, exempt buyers from specific obligations, according to the President. It will become impossible to seek indemnities for periods longer than five years. No assessment has been made about how the new rules will affect the amount of indemnities flowing into the state pension system and municipal budgets, Radev said.

After the President's veto was announced, Prime Minister Boyko Borissov urged the parliamentary group of his GERB party to draw up and submit a new amendment to the Privatization and Post-Privatization Control Act, GERB's press office said. The idea is to dispel any doubts about lobbyism in favour of a given entity. The new provisions should make it clear that the rules do not apply to privatization contracts which have already been signed.