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Bulgaria: Sisecam undecided on Russe plant

Turkish glass giant Sisecam is still undecided on whether to go ahead with the building of a USD 100 million flat glass plant in Russe as the Bulgarian Government has not yet agreed to several of the …

Turkish glass giant Sisecam is still undecided on whether to go ahead with the building of a USD 100 million flat glass plant in Russe as the Bulgarian Government has not yet agreed to several of the company“s conditions. A six member company delegation met state and local authorities at the beginning of March 2003, but failed to reach agreement. Sisecam could opt to build the plant in Romania instead of Bulgaria. In order to attract the glass maker, the Bulgarian Government offered Sisecam two locations for the plant, one in Russe and another in a region with high unemployment. It is still uncertain how the property on the land will be transferred since Sisecam insists on a symbolic price. One proposal is to consider the land as an in-kind contribution to the assets of a state company, to be transferred subsequently for the symbolic figure of BGL 1 to Sisecam. This leaves the problem of the substantial state fee for the land transfer (assessed on the tax valuation of the land) which Sisecam is unwilling to pay. Furthermore, if the investor chooses Russe, it will not be exempt from corporate tax. The Turkish company is also asking the state to build the infrastructure around the plant including a road, gas pipeline and access to the National Electricity Transmission Company network. The government has not yet calculated the exact cost of the infrastructure project. Sisecam is also insisting on amendments to Bulgaria“s trade agreements with other countries, which would facilitate the import of glass. There still remains the delicate question of the concessions on raw material extraction and the river port facilities. Pending the Turkish company“s final decision, the government has suspended procedures for awarding concessions on raw materials (mainly sand) in northern Bulgaria, as the materials might be used by the investor. For that reason, the government is asking for a quick decision from the Turkish glass maker, which is also a shareholder in local soda ash producer Solvay Sodi Devnya.

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