The Ministry of Economy has presented a draft of a new law, which is currently undergoing public consultation. The legislative act enables the state to enter into long-term agreements with private investors for infrastructure development when this proves to be more efficient and beneficial to the public. Contracts with the private sector will have a duration of between 10 and 35 years.
The development of public-private partnerships has been identified as a key priority in the government program by both Prime Minister Rumen Radev and Minister of Economy Alexander Pulev. The goal is to ensure the faster realization of significant infrastructure projects, including:
- The expansion of the Trakia motorway;
- The construction of the new Cherno More and Rila motorways;
- The expressway with a tunnel under Petrohan;
- The Veliko Tarnovo - Makaza corridor.
The motives behind the bill indicate that Bulgaria lags significantly behind other European countries regarding this operating model. According to data from the European PPP Expertise Centre at the European Investment Bank, only two projects worth a total of 880 million euros were implemented in the country between 2019 and 2023. By comparison, investments in Greece for the same period reached 2.31 billion euros. The ambition of the new legislative framework is for the number of such projects in Bulgaria to grow to at least five by 2030.
When applying the model, the private investor assumes the operational risk and provides full or partial financing. Returns can be secured through user fees, international financial instruments, or state payments directly linked to achieved quality performance indicators. If established criteria are not met, these payments may be reduced or completely suspended.
Which projects will be implemented through this partnership will be decided by a specially created council under the Council of Ministers. Before a final decision, each proposal will undergo a review by a unit within the Ministry of Economy, which will analyze risk allocation, national security issues, and ownership. The Minister of Finance will be responsible for the strict observance of fiscal rules, and a project will be approved only if the collaborative work proves more advantageous than purely public financing.
The law establishes strict procedures and control rules:
- Private partners will be selected through competitive procedures with equal conditions for companies from Bulgaria and abroad, and all facilities will be entered into a public register;
- The state and the investor will be able to establish joint commercial or stand-alone project companies, with the public side holding a blocking quota in institutional partnerships;
- In the event of early termination of a contract due to non-performance, the private partner is obliged to maintain the service for up to 6 months until a new operator is selected.
Financial penalties are introduced for violations of the law. Fines for legal violations range between 2,500 and 5,000 euros, and if the responsible person under the contract is a minister, they vary between 5,000 and 10,000 euros. A specific sanction of 1,000 to 3,000 euros is provided for public partners who fail to publish information regarding investor selection procedures on their official websites.