Bulgarian government pays to hand over business of its biggest Black Sea port to a controversial local politician

Varna, Bulgaria (PortSEurope) October 25, 2020 – Bulgaria’s largest Black Sea port of Varna will have its two main access canals dredged to a depth of up to 13.5 metres (currently 11 m) in order to attract larger ships and improve the access to Varna West Port, Angel Zaburtov, General Director of state-owned Bulgarian Ports Infrastructure Company (BPI Co.), said in a media interview. The Varna lake part of the port and the turnaround channel will also be dredged as part of the BGN 350 million (€179 million) government-funded project, which aims to attract cargo from the China’s new Silk Road project and the new trans-Caspian transport corridors. Some eight million tonnes of material will be dredged from the channels and lake bottoms, with which the canals’ banks will be fortified. Port of Varna (Bulgarian: Пристанище Варна, Pristanishte Varna) is the largest seaport complex in Bulgaria. Located on the Black Sea's west coast on Varna Bay, along Lake Varna and Lake Beloslav, it also comprises the outlying port of Balchik. It has a significant further development potential with 44 km of sheltered inland waterfront on the lakes alone, easily accessible by road and railroad and adjacent to Varna International Airport. But Bulgaria’s independent media insists that the whole project is to benefit a private port (Port TPP Ezerovo), majority owned by Ahmed Dogan, honorary chairman of the predominantly ethnic Turkish Movement for Rights and Freedoms (MRF). Dogan is controversial local politician, linked in media publications to the communist-era political police. He is also described as a conduit of Russia’s interests in Bulgaria. After the implementation of the dredging project, Port TPP Ezerovo is expected to take over the grain and containers currently handled by the state-owned Varna port terminal that is close to the city centre. This move was already in plan in 2017, when the mayor of Varna, Ivan Portnih, announced that the big ships now loading grain and scrap near the city centre in the state port must move to the quays of TPP Varna near the village of Ezerovo. TPP is a very large coal-fired thermal power plant. The dredged canals should be ready in 2021 when Dogan's private port will most likely take over the processing of cereals cargo and containers, which are now served by the state Port of Varna, which generates from this some BGN 60 million (€30.6 million) per year in income. After 2021, this revenue will pass into the hands of the honorary leader of the MRF, according to leading local business newspaper Capital weekly. The dredging project is managed by state-owned BPI Co, which in 2019, signed an agreement with another state-owned company - Transport Construction and Reconstruction - to carry out the activities for the deepening of the two canals. Increasing canal (channel) depth might be a major step towards a future concession of the port. The project envisages Canal 1, which connects the Black Sea with Varna Lake and has a length of 3.8 km, to be dredged to a depth of 12.78 metres with a width of the bottom in the straight sections 103 metres, and in the curves – 178 metres. Canal 2 is located between Varna and Beloslav lakes and reaches Port Varna-West. The channel was completed in 1976-1978. Its total length is 10.2 km, its width is 106-130 metres with a depth of 12 metres. The goal of the project is a complete and long-term solution to the current problems of approach and ship manoeuvring and future needs for new manoeuvring zones in accordance with the investment projects of the operators of terminals and ports located in the area of Varna port, the government said. It added that the project will provide the necessary conditions for the development of all ports in Varna, in accordance with good maritime practice for safe shipping. The dredging works are performed by Russian specialised ships, who were given the project without a tender. Also, without a tender and even without paying a rent, Dogan is using the state-owned quay wall of Port TPP Ezerovo. Port Infrastructure also built new cable channels, sewage, new street lighting system, new access points and a system for access control in Port Varna East. In Port Varna West, the infrastructure upgrade, water supply network and road surfaces have been completed. It is also planning the creation of yacht marinas with 100 docking places each in both Varna ports. Theoretically, the forthcoming deepening of the waterway through the Varna and Beloslav lakes should be good news for the state port of Varna West in Devnya. It serves several of the large industrial plants located there - Agropolychim, Solvay Sodi and Devnya Cement, as well as the ferries, whose terminal is located in Beloslav. The distance from Varna Bay to Varna West is about 25 km, and the waterway passes under the Asparuhov Bridge and via two canals, which are periodically blocked by silt. The need for additional depth for the Port of Varna West has been under discussion for decades, but without any results. The topic has been repeatedly put on the agenda by the owners of Agropolychim, who want to provide access to the port of Varna West to up to 60,000 tonne-ships, and not just the 30,000 tonnes vessels currently docking there. This is what, according to opposition politicians and the independent Bulgarian media, raises suspicions about the government's sudden decision to allocate money for the deepening of the waterway under the Asparuhov Bridge to Varna Lake exactly when Dogan started the implementation of his project for the new TPP Varna Port. The intentions announced by the Sigda company, in which Dogan is the majority owner, are to extend the quay of the existing Port of TPP Varna, to increase the number of its berths, as well as its depth to 12.50 metres. The renovated port will be able to handle up to 8 million tonnes of cargo per year. For comparison, the state-owned Port of Varna currently processes about 10 million tonnes annually. After the construction of new container infrastructure, the Port of TPP Varna will have a capacity of about 200,000 TEU per year and will become the biggest container terminal in Bulgaria. This is why it is expected that the Port of TPP Varna will soon make the existence of the state - "Varna - East" meaningless. How this will happen became clear in the autumn of last year, when the traditional queue of grain trucks in front of the state port, waiting to be unloaded on export ships, moved to the port of Varna TPP. The operator of Bulgarian state-owned Port of Varna, located on the Black Sea coast, said that it turned to a net loss of 926,000 levs ($514,000/473,000 euro) in the first quarter of 2020 from a net profit of 852,000 levs in the same period of 2019. Operating revenue dropped 16.2% year-on-year to 12.8 million levs in the January-March period of 2020, the company said in an interim financial statement. The volume of cargo handled decreased 5.7% to 1.82 million tonnes in the first three months of the year. The port operator's operating expenses fell 3.9% to 12.2 million levs in the review period. Port of Varna employed 1,383 people in the first quarter, down from 1,445 a year earlier. The company's business plan envisaged revenue of 13.4 million levs and a net profit of 75,000 levs in the first quarter. Copyright (C) PortSEurope. All Rights Reserved. 2020.

Bulgarian government pays to hand over business of its biggest Black Sea port to a controversial local politician

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Bulgarian government pays to hand over business of its biggest Black Sea port to a controversial local politician

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