site.btaPM Borissov: Bulgarian Government Hasn't Changed Its Position about South Stream

PM Borissov: Bulgarian Government
Hasn't Changed Its Position
about South Stream


Sofia, December 8 (BTA) - "The Bulgarian government has not
changed its position about the South Stream pipeline," said
Monday Prime Minister Boyko Borissov, speaking in Parliament.
"We support its implementation provided it is done in compliance
with EU rules," he further recalled. Meanwhile, the Prime
Minister dismissed allegations that Bulgaria would lose hundreds
of millions if the project was suspended.

Borissov briefed MPs on the findings of an analysis of collected
South Stream documents.

The Prime Minister said after last Monday's announcement by
President Vladimir Putin that the project was suspended, there
is no formal Russian position yet.

Borissov said that despite much speculation as to what
Bulgaria's losses will amount to in case South Stream is not
implemented or its route changed, there is no longterm gas
transit contract and a completed financial model about the
project.

Borissov said that Russia's Gazprom Export has submitted to the
Bulgarian Energy Holding a draft long-term gas transit contract,
which has not been signed. He quoted experts that the draft
does not comply with EU's legislation and contains clauses that
are unfavourable to BEH in its capacity as shareholder in the
project company. The draft envisages an interim internal rate of
return of 4.25 per cent compared with a set internal rate of
return of 8 per cent under a protocol of August 27 2012 and very
low transit tariffs for the first 15 years when BEH needs
revenues to pay out its loan to Gazprom.

The Prime Minister said that in effect the draft contract
envisaged profits only until investments are returned.

Borissov said that these facts are enough to put an end to
speculations about the lost profits from the project for
Bulgaria.

He recalled that after the EU opened an infringement procedure
against Bulgaria over the selection of a contractor, Bulgaria
can't go ahead with the implementation of the South Stream
project. In a letter of August 14 2013, the European Commission
warned the Bulgarian authorities that there might be
inconsistencies between the 2008 Bulgarian-Russian pipeline
agreement and EU legislation.

Borissov said he was convinced of the benefits if South Stream
went through Bulgaria, but that indirect revenues such as taxes
are set to exceed transit fee revenues. He said that Ministers
Tomislav Donchev and Temenouzhka Petkova will be visiting
Brussels on Tuesday for a meeting of ministers of South Stream
countries. Borissov said that Bulgaria will insist that South
Stream is built under EU rules. PK/PP



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