site.btaEconomy Minister Shtonov Before BTA

Sofia, August 26 (BTA) - The price of electric power should be increased gradually in the long term, in line with the improvement of the country's economic condition and the establishment of a fund to support energy-poor households, Economy and Energy Minister Vassil Shtonov said in an interview for BTA.

Even this week the meeting of the Council of Ministers will discuss a decision to establish an Energy Board intended to assist the government in stabilizing the energy sector. The Energy Board is expected to guarantee expertise, independence and efficiency in decision-making in the energy sector. All stakeholders on the electricity market should make concessions so that the system may remain stable, Shtonov explained.

A working group has already been established at the National Electric Company (NEK) which is updating the principles of sale of electric power on the free market at freely negotiated prices. Procedures for public announcement of offers are being prepared and rules for direct negotiation procedures are being drawn up, the minister said. All power plants are currently implementing their programmes in preparation of the fall/winter season.

South Stream Gas Pipeline Project

Taking a question why the management of South Stream Bulgaria disregarded orders and nevertheless undertook an increase of capital, as well as what the further actions on the South Stream project and the project company for Bulgaria will be, Shtonov answered that the implementation of the project will bring benefits like new jobs and guaranteeing security of natural gas supplies. "However, for the real construction to begin on Bulgarian territory all requirements of European legislation should be met. We are working on eradication of the discrepancies," the minister said.

"On August 11 I issued a decision for termination of further actions on the project until the end of the European Commission's infringement proceedings. This means that actual steps on the construction of the gas pipeline in Bulgaria will not be undertaken before we eradicate all discrepancies with Community law. The capital increase in itself does not mean launch of construction of the project but allows preparatory work on it, including master plans, administrative procedures and analyses," he said.

Operational Programmes

Funds under Operational Programme Competitiveness will not be lost, Shtonov said. Slightly over 192 million euro in grants should be certified in 2014. A total of 118 million euro have been certified to date and 16 million euro are in the process of being certified. This means that nearly 70 per cent of the funds planned for the year under the operational programme have been certified.

Shtonov recalled that the Certifying Authority had objections on three procedures and that certification under these has been suspended. The Managing Authority of OP Competitiveness has eradicated the problems and the green light for certification of one of the procedures was given on August 20. The requirements on the other two will be met within the shortest term so that the 25 million euro awaiting certification will be submitted to the Certifying Authority. The remaining 33 million euro will be paid to business and certified until the end of 2014, the minister said. This is perfectly feasible and the funds will not be lost.

The budget of the new Operational Programme Innovations and Competitiveness will reach 1,390 million euro, Shtonov said. There are plans to establish a Guarantee Fund for the next programme period 2014 - 2020 to resolve one of the main problems of business - lack of sufficient security at the need of crediting.

Issues in Tourism

In spite of the unfavourable year in terms of weather conditions, according to Bulgarian National Bank data the revenue from international tourism in January-May was 5.3 per cent higher than the same period in 2013, Shtonov said, commenting on the expectations of business for a tangible decline in tourism this year.

Taking a question about the funds for the national tourism advertisement campaign, the minister pointed out that the objective is to channel 1 per cent of the revenue from tourism towards national promotion of Bulgaria, investigation of target markets and market analyses. The caretaker government will make the necessary analysis and the basis of the next budget so that the regular government and Parliament will be able to discuss it and pass it in the form of a law, the minister added.