According to the Ministry of Economy, the Bulgarian state is moving to establish new rules for public-private partnerships on infrastructure projects lasting between 10 and 35 years. The initiative, currently released for public consultation, aims to accelerate the realization of major transport projects like the Cherno More and Rila motorways, the Petrohan tunnel expressway, the Trakia motorway expansion, and the Veliko Tarnovo – Makaza corridor.
The Ministry of Economy launched the public consultation for the draft law following prioritization by Prime Minister Rumen Radev and Economy Minister Alexander Pulev. According to the background motives of the bill, public-private partnerships in Bulgaria lag behind several European nations, limiting private investment and public service efficiency. Data from the European Expertise Centre on Public-Private Partnerships at the European Investment Bank shows that Bulgaria completed two such projects worth 880 млн. евро between 2019 and 2023. By comparison, Greece reached 2,31 млрд. евро in the same period. Expectations are that the law will lift these investments to at least five projects by 2030 to help offset poor public finances, eliminate corruption risks, and bypass in-house procedures.
Legal Framework and Project Oversight
State entities or municipalities can partner with one or more private investors under the proposed framework. While responsibilities and financing are split, the private partner must assume operational risk and can provide total financing. Projects may receive funding from user fees like usage charges, international financing, or a mix of sources. The state can also utilize availability payments, covering costs only if the asset or service exists and meets agreed indicators; otherwise, payments drop or halt entirely.
A newly created council attached to the Council of Ministers, featuring representatives from most ministries, will decide which projects use this partnership model. First, an expert unit inside the Ministry of Economy must approve the initiatives after evaluating risk distribution, property ownership, and national security. Additionally, the financial minister must clear the projects to ensure compliance with fiscal rules and limitations set by the Public Finance Act.
Did You Know? Private pension companies in Bulgaria will be allowed to invest in infrastructure projects starting next year.
Selection Procedures and Contract Rules
A project gains approval only if joint construction proves more financially advantageous than using public funds alone. A specialized mechanism will evaluate full lifecycle costs, expected benefits, and socio-economic impacts. Private investors can submit proposals, but submission does not guarantee selection as the executor. A competitive bidding procedure will choose the private partner under equal conditions for domestic and foreign participants, and authorities will launch a public register tracking all partnership projects.
The legislation sets strict parameters for the business relationship. Partners can form an institutional public-private partnership via a specialized commercial company where the state contributes funds, real estate, or other property restricted solely to the project. The public partner retains a blocking quota on key decisions regardless of equity share, or parties can form a single-purpose project company. Contracts must explicitly define payment structures, financial models, indexation, risks, quality standards, controls, penalties, termination triggers, property disposition, and environmental obligations.
Contract Enforcement and Penalties
Contract modifications are permitted solely under unforeseen circumstances, and unresolved disputes can lead to termination by either party. If the private partner breaches terms, the public entity can terminate the agreement early without notice. The private operator must continue maintaining the service for up to six months until a new operator takes over. Contract terms can extend by no more than one-third of the original duration, but replacing the private partner with another entity is forbidden.
Fines for violating statutory conditions range between 2,500 and 5,000 euros, scaling to between 5 хил. and 10 хил. euros if the contracting party is a minister. Failing to publish the private partner selection procedure on an official website carries a penalty ranging from 1,000 to 3,000 euros.
Frequently Asked Questions
What is the duration of public-private partnership contracts?
According to the law, contracts will last for a minimum of 10 years and a maximum of 35 years.
How are private partners selected for these projects?
Private partners will be chosen through a competitive tender procedure offering equal terms to both Bulgarian and foreign participants.
What happens if a private partner fails to meet contract obligations?
The public partner can terminate the agreement early without warning, and the private operator must continue maintaining the service for a maximum of six months until a replacement operator takes over.
How will the state balance the financial risks of these long-term infrastructure contracts?
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