BEFORE:
Mr. BOYKO BORISOV
PRIME MINISTER
OF THE REPUBLIC OF BULGARIA
Mr. DELYAN DOBREV
CHAIRMAN OF
THE COMMISSION ON ENERGY
TO HC
MR PETER KANEV
CHAIRMAN OF
THE COMMISSION ON ECONOMIC
POLITICS AND TOURISM
TO HC
MRS TEMENUZHKA PETKOVA
MINISTER OF ENERGY
Mr. BOZHIDAR LUKARSKI
MINISTER OF THE ECONOMY
RE: Proposals of the business to introduce a new mechanism for
redistribution of the costs of obligations to society
DEAR MINISTER - PRESIDENT,
DEAR CHAIRMEN OF PARLIAMENTARY COMMITTEES,
DEAR MINISTERS,
We are addressing you in connection with the speech of Mr. Georgi Kadiev, member of the economic commission, in the morning block of "BTV" television on 25.01.2014. on business proposals to ease the burden of cost-related "obligations to society". The demands of the industry are principled and transparent. In our opinion, they cannot be an answer to the question "is there a mafia in Energy?", which was the topic of the show.
We are categorically against the industry in Bulgaria being commented on in the context of the show about the energy mafia. Enterprises invest and create jobs in Bulgaria. In the metallurgy sector alone, the investments for the last 10 years are BGN 4 billion. These are investments mainly for renovation, ecology and energy efficiency. At the same time, in 2014, electricity for the industry became more expensive by 10% due to the implemented policy of lowering the price of electricity for the population. Thus, cross-subsidization increased and the burden on the industry increased in conditions of continuing economic crisis and outflow of investments.
Over the past years, Europe has assessed the risks of the excessive weight of the Climate-Energy package on industrial activity. The EC launched the reindustrialization initiative. The need for a greater contribution of industry to EU GDP was discussed. Business proposals are dictated by the examples of successful policies to manage costs for society in a number of European countries. There is no country in the EU that has not introduced relief for its energy-intensive industry. Romania introduced such a model last year and in July 2014. was approved by the EC. In addition, Bulgaria borders countries that do not have a commitment under the "Climate-Energy" package, and this makes our economy particularly vulnerable and uncompetitive.
In mid-2013, the BSP pushed through a change in the Energy Law to export electricity without payment for green energy (without price obligations to society) to Serbia, Macedonia, Turkey and Greece, which further undermined Bulgaria's position as a promising place for investment. Thus, BGN 150-200 million for green energy does not come to NEK. The motive was "unblocking exports". Electricity is a raw material. Exporting cheap electricity is exporting jobs and creating a competitive advantage for the economies of neighboring countries. From the export of electricity, the revenues in the energy industry are about BGN 500 million. Bulgarian industry realizes revenues of tens of billions of BGN, on which taxes, duties, insurances are paid and work is created for accompanying businesses.
Due to the crisis, increased cross-subsidization, expensive energy and the absence of re-industrialization policies, a trend is emerging to export entire productions from Bulgaria to other countries. That is why in recent years we have repeatedly discussed the topic of redistribution models in various formats with the executive and legislative branches. We have a consensus at the expert level and at the level of representatives of interest in Energy that there is a need for a new model for redistributing the costs of obligations to society.
We offer something good for the competitiveness of the country's economy and an increase in the gross domestic product. With references to good practices in other European Union countries. The introduction of a new cost redistribution model will:
stop the outflow of investments and capital to neighboring countries where there are no obligations under the EU's "Climate - Energy" package.
stimulates economic activity in the country - large operators create business for thousands of large, medium and small companies, including BDZ - freight transport, ports, logistics companies, service providers, construction, producers and traders of electricity.
stimulates the energy sector – manufacturing enterprises are the base load in the energy sector. The NSI showed the imbalance of leading consumption in the household, which indicates the state of the economy. Excessive costs to society kill the economy, and with it energy.
improved Bulgaria's balance of payments - the affected enterprises export more than 70% of their production.
It will stop exporting jobs by exporting cheap electricity to neighboring countries.
Mr. Kadiev is a member of the economic commission in the National Assembly. We cannot understand the motives behind Mr. Kadiev's statement, which will shape public opinion against employers, A-class investors and strategic partners of Bulgaria with billions of investments that create the highest added value in the country's economy.
There is no way these enterprises can be identified with the energy mafia!
Our requests are principled and transparent!
January 27, 2015
With respect,
Kiril Domuschiev
Chairman of the Board of KRIB
Eugene Ivanov
Ex. director and member of the Board of KRIB
Konstantin Stamenov
Chairman of the Board of BFIEK
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