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Roads to be a driving force of the Bulgarian construction market

06-14-2012 10:56 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: PMR Ltd.

Roads to be a driving force of the Bulgarian construction market

Access to EU funding and the investments in the energy sector are the predominant factors determining the development of the Bulgarian civil engineering construction sector in the next three years. It is expected that this segment will lead the development of the construction market in Bulgaria.

According to the research company PMR’s latest report, entitled “Construction sector in Bulgaria 2012 – Development forecasts for 2012-2014”, the absorption rate of the programmes developed with EU funds has been increasing in the past two years, suggesting that road infrastructure development will become one of the most dynamic parts of the civil engineering market, which in 2011 was worth approx. BGN 5.7bn (€2.9bn) in total, up by 7% y-o-y.

The increased absorption and usage of EU funding for the development of the country’s road network led to a substantial increase in the number of projects in the pipeline, with the investments planned in road infrastructure development to note a significant yield for 2012-2014. The number of active road projects currently under construction is more than 30 and is scheduled to be finished in 2012-2013. As a result, Bulgaria’s road network will record significant change and a big increase in the length of operational motorways. It is estimated that projects in excess of €0.8bn are to be completed by the beginning of 2014. In addition, the value of projects planned for 2014-2020 period exceed €4bn.
Generally, it seems that the availability of EU funds and the increased capacity for absorbing such funding are likely to contribute towards a steady growth of the engineering sector in the following decade. Although priorities might change slightly over the course of the following eight years, it is believed that given the stable financial resources at its disposal, Bulgaria will continue developing projects in line with high priority trans-European corridors.
In the railway construction sector, the focus of development of the railway network will be in the Sofia-Plovdiv and Plovdiv-Bourgas railway sections, and the Sofia-Mezdra-Medtkovets. Railway infrastructure development in Bulgaria still lacks dynamics, although improvements in the past two years have been notable. A limited interest and general indifference towards the development of railway transport in its neighbouring countries certainly is compounding the situation in Bulgaria, although the intention to turn more to the trans-European corridors project might stimulate faster development in the next three years.
In the airport construction sector recent efforts to develop air transport infrastructure in Bulgaria have been focused mostly on the search for potential investors in concession procedures that will invest and develop three airports − Gorna Oryahovitsa, Plovdiv and Sofia. It seems that the concession is the preferred model for the airports' developments, as Varna and Bourgas airports are already given under concession to Fraport Twin Star, a German-Bulgarian consortium.
In the heavy industry, one of the major events in recent months noted in Bulgaria was the decision to abandon the Belene Nuclear Power Plant construction plans, announced by the government in late March 2012. Another major event will be the apparent race between the two major gas pipeline projects in order to determine which of the two is more likely to become reality the soonest – Nabucco or South Stream. Recent developments suggest that both pipeline projects are still valid and are heading towards realisation.

This press release is based on information contained in the latest PMR report entitled “Construction sector in Bulgaria 2012 − Development forecasts for 2012-2014” http://www.pmrpublications.com/product/Construction-sector-Bulgaria-2012.

For more information on the report please contact:
Marketing Department:
tel. /48/ 12 618 90 00
e-mail: marketing@pmrcorporate.com

PMR (www.pmrcorporate.com) is a British-American company providing market information, advice and services to international businesses interested in Central and Eastern European countries as well as other emerging markets. PMR's key areas of operation include business publications (through PMR Publications), consultancy (through PMR Consulting) and market research (through PMR Research). Being present on the market since 1995, employing highly skilled staff, offering high international standards in projects and publications, providing one of most frequently visited and top-ranked websites, PMR is one of the largest companies of its type in the region.

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