This project was submitted in the following language: български (bg).

Project description

North-west of Bulgaria is the poorest region in EU. In order to have economic development in the region, it is necessary to build the E79 road Botevgrad—Vidin. The only way of this happening is the Juncker Plan.

After the construction and commissioning of Danube Bridge 2 at the town of Vidin, it appeared that road E79, in the Vidin—Botevgrad section, cannot accommodate the increased traffic. The traffic capacity may be increased only through the construction of express road between Vidin and Botevgrad. We would like to obtain concession for the road and to build it with funds from the Juncker Plan. This is the only quick way to launch construction, to have new investments in the north-west of Bulgaria, which is the poorest region in the EU.

Country, Region

Bulgaria [Враца (Vratsa)]

Start date

October 2016

Estimated project cost

EUR 450 million

Sector

Trans European Network – Transport

Asset ownership

Public

Project type

Greenfield

Project status

(Pre)feasibility

Revenue type

Market-based

Economic rationale / Business Model

The commissioning of the Danube Bridge 2 enabled the increased use of shortest way from Middle East, Turkey and Bulgaria to Europe. However, in the Botevgrad—Vidin section, it is a two-way minor road which has not been subject to major renovation for nearly 20 years. In order to use the new bridge at a 100 % of its capacity, a new express road needs to be built connecting the two towns. Preliminary analyses show that an investment of EUR 450 million is needed. With 10 % deductibles on our party, the construction of the whole road will require additionally about EUR 405 million. Traffic growth by only 40 % will allow for repayment of the credit together with interest for a period of 15 to 20 years using the toll revenue. Funds will also be accumulated for summer and winter maintenance, as well as for major renovations. In the period between the 20th and the 35th year (the duration of the concession), the investor would be able to raise sufficient profit from the realised investment. Launching of construction by the end of 2016 and completing the road for a maximum of 30 months will allow for the development of additional supporting activities in the poorest region in EU. The depopulation of the region will be stemmed and a basis will be provided for its future development

Financing details

Project financing secured: EUR 45 million (10 %)

Self participation: EUR 45 million (10 %)

Financing source: Private

Considering carefully the funding possibilities and taking into account all parts and participants in the construction process, the funding should be divided in 3 parts with regard to its origin
1st — the State should pay for the design in all its parts and the expropriation of any land, as the road is public state property.
2nd — own contribution of the investor up to 10 %
3th — credit funds with use of the EU guarantee 90 %.
Funds will be absorbed in 4 phases

The promoter has applied or has the intention to apply for EU or EIB financing related to this project

Existing or potential bottlenecks for the realisation of the project / Potential risks

Since the project may be constructed in its current form only with very good cooperation between the State and the private investor, the main hurdles may occur in the state institutions in 4 directions:
Advertisement of the concession and signing of the contracts
The detailed design of the section Vratsa—Vidin (projects of the section Botevgrad—Vratsa are completed)
Land expropriation procedures
Procedures for coordination with public institutions and especially with the National Railway Infrastructure Company due to the crossing of the express road with the railway line Mezdra—Vidin

Project additional information

The construction of the Vidin-Botevgrad express road will allow for reversion of the negative trends in the north-west of Bulgaria. The road will be constructed by investors and builders for 30 months. The idea of the investor is to use only construction companies from the region, registered and operating in the north-west of Bulgaria.For a period of 30 months, EUR 15 million will remain in the region each month, and this will initially stop the loss of workforce, and the construction companies will be able to invest in new machinery and supporting activities. The new road will allow for a fast connection to Sofia and Europe, which will immediately attract new investors. It should also be remembered that this will speed up the traffic towards ferry Oryahovo—Bechet, Kozloduy NPP, etc.

Publication: 23/06/2016 | Last update: 20/07/2016

The Commission gives no warranty and makes no representation, whether expressed or implied, that the Project Information is error free. The Project Information is provided without any guarantees, conditions or warranties as to its accuracy.