Municipalities owe BGN 100 mln to construction companies

“Municipalities owe more than BGN 100 mln to construction companies,” announced Svetoslav Glosov, BoD Chairman of the Bulgarian Construction Chamber, while reporting on the construction sector for 2010 and presenting the expectations for 2011. These are overdue liabilities for current repairs and winter maintenance of municipal roads but there are also problems with the management of funds by municipalities. “Local authorities without arrears are a minority,” Dora Yankova, Chairperson of the National Association of Municipalities, told Klassa, specifying that she could not say which municipality was the largest debtor. According to her, even in Europe, there are no municipalities that make an accurate account of their funds.

According to Glosov, however, the indebtedness to the sector is one of the reasons for its problems. Data of the Bulgarian Construction Chamber showed that electricity distribution companies are also quite indebted to building companies. He gave as an example CEZ which owes BGN 168 mln to construction companies for services rendered. However, the companies have drafted a plan for a rescheduled payment of their receivables until 2020. CEZ specified that it has a 5-year plan for the repayment of its debt by 2016.

Output in the construction sector rose slightly by 0.2% in Q1 2011, compared to the same period of last year, data of the Bulgarian Construction Chamber showed.

The branch organisation also warned of a decline in public procurement orders as of the beginning of 2011 “This affects mainly small- and medium-sized enterprises which rely heavily on these tenders,” explained Glosov. Some 649 contracts worth BGN 863 mln were signed in the first six months of 2011, registering a 50% decline, compared to the same period of last year. The Bulgarian Construction Chamber warned that EU funds are not being absorbed well. According to the branch organisation, absorption so far is merely 10.9%. However, the Bulgarian Construction Chamber expects sustainable growth in the sector by the end of the year.

Прочети цялата новина

Свързани новини: