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Bulgaria Mulls Mega-Structure for Water Supplies at Flat Price

Date: 11.02.2011

The water utility in Sofia has been harshly criticized for shortage of investments in the upgrade and maintenance of the system. Bulgaria should establish a national state-owned company, which will group all big water management firms and supply tap water to each and every settlement at equal prices, officials from the country's regional development ministry have suggested.

"We suggest that one major state-owned company, modeled on the state power utility NEK, takes over under its umbrella the ownership of all highway pipes, dams and recycling stations," said Hristo Stankov, head of the State Companies directive, at the ministry.

Representatives of the water supply and management companies however commented that the proposal for a flat price of the tap water and the establishment of one big company will be met with fierce opposition.

Twenty years after the collapse of the communist regime Bulgaria's water sector remains one of the least reformed systems in the country. Except for Sofia municipal water supply, which has been granted on concession to a foreign investor, all other units in the sector are either owned by the state or the municipalities.

The cash-strapped country can not afford to upgrade and maintain all units in the system – from the dam to the end users – and they have been left to the mercy of time and vandalism.

Summer drought, lagging dam construction, leaks and failures in old pipes bring about water rationing for hundreds of thousands of Bulgarians every summer.

Obsolete water and sewage networks made of asbestos cement are another problem as they cause huge leaks and hurt the quality of the water. An average 60 percent of water pumped in the pipes never reaches consumers, while in some regions losses account for up to 90 percent, experts say.

When it comes to the privatization of their water sector, many poor countries hope that the private and foreign-owned does a better job.

But in Bulgaria, this is proving highly controversial. Economists are divided over whether this would help or hinder the sector and have often engaged in spats in the pages of local newspapers.

Privatization is a dirty word for those, who claim that Bulgaria risks turning into a Third World country, which rapacious foreign investors will only suck money from. Brussels officials have also given credence to the idea, accusing the government of flirting with the idea of privatization.

Plans by the Bulgarian government to privatize part of the country's water sector have caused indignation among the ordinary people too. They say this model does not serve the public interest and cite Sofia's municipal water supply, which was auctioned off nearly a decade ago, only to be followed by drastic price hikes and exorbitant profits for the concession holder.


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