Bulgarian Seaport Head on Strategic Investment Zones Best Option for Country Development

American Times Presents, Mr. Anguel Zabourtov, CEO of the Bulgarian Infrastructure Company

 

Mr. Zabourtov, please introduce our readers to your position as General Director for the Bulgarian Ports Infrastructure Company [BPIco] and its function within the Ministry of Transportation, IT and Communications [MTITC].

The BPIco is not just focused on infrastructure but systems as well. In that sense we do not have the normal title of Port Authority that most do throughout the globe. Rather we act as a landlord to the various seaports throughout Bulgaria with management under different entities, public and private, which the latter is achieved via concession through the MTITC. It is a rather strange structure.

I personally joined the company in 2003 performing various directorial functions and spent three years in the private sector as consultant for maritime businesses as well. The last two years I have served as the General Director.

 

What is the capacity of your port system?

Aggregate, we handle 30m tons of cargo annually. This is not a lot and many single ports throughout the world handle this amount annually. However, I view the BPIco as a single company that has several terminal branches in Burgas, Varna on the Black Sea and Ruse and Lom on the Danube River.

 

Thirty million tons is certainly on the small side. What are you doing to expand, if anything, and who acts as your largest competitor in the region?

Port of Constanta in Romania is the largest port in the Black Sea area and our neighbor. However, let’s focus in Georgia, Ukraine and Russia. Specifically, Georgian ports offer huge potential. Many companies are showing interest due to the Caucasus’ location where they can access the Central Asian market. The good news is that according to some estimation much more traffic will begin to enter the Black Sea and Bulgaria has a chance to absorb freighters in addition to the competition. I envision us acting as a first port of call and a potential distribution center for the region. All the ports lacing the Sea are interlinked and it is never good to have turmoil in Ukraine in Russia, it affects us all.

The Black Sea is not the China Sea. No port here will ever be a Singapore or Shanghai, as such; Bulgaria’s ports need to link up with the transit and distribution route of all goods heading to Romania, Northern Turkey, Ukraine and Russia. Something we can do domestically is develop industrial zones near our ports for European retailers, producers etc. where they can benefit from lower labor costs within the EU and easy shipping routes to get their goods to markets. A good example of this is Varna West port where there is a port cluster, meaning the industry is located next to the port itself like fertilizer, soda ash, grain and cement companies. So in my opinion we need to develop this further in Varna, which we will in the near future, but as a general practice in all the ports. 

 

Is this cluster practice you are doing in combination with the National Company of Industrial Zones (NCIZ)?

Not broadly. But since you mentioned it we are looking at something with them that is in the preplanning phase for the Port of Vidin. The NCIZ is looking at developing an industrial zone in the region and we are thinking of creating a joint venture which factors in both the port and their zone ambition. In this instance we need to develop an intermodal terminal capable of railway freight. We want to have tremendous infrastructure in place and invite investors to come and do their work at a superior location with very good taxes and general business structure. However, whenever one develops in such a rural area you come across human resource issues.

 

You mentioned Varna West. Is that the primary port in Bulgaria?

It depends. Varna handles the most general cargo but Burgas handles nearly all oil cargo and if you talk about overall cargo it is Burgas.

In fact, the port in Burgas had a moment to expand in a huge way about 7-8 years ago when a large Austrian steel company was looking for a location on the Black Sea. The company had signed an MoU with the Bulgarian Government to develop a steel mill. Their cargo alone was estimated at 12-13m tons per year at a time when Burgas’ total cargo was 10m. Unfortunately the deal fell through but even today we are eager for such an operation to come back to Bulgaria.

 

Was it a factor of the port not being able to expand for new capacity or something else?

Yes, but the project occurred at the beginning of the global recession. Eventually their Board stopped the deal due to global concerns.

 

It seems BPIco’s growth and sustainability is inherently linked to the overall health of Bulgaria’s economy.

Absolutely, we need to look at developing an economic impact assessment to see how the cargo is related to the local and national economy. I’ll give you an example. Last year we exported about 1.5m tons of sunflower seeds, a huge amount. What would benefit the country more is orienting itself towards value-added goods like sunflower oil. So it’s not all about weight but quality of cargo leaving the port; this type of export would greatly benefit the country as well as the port.

 

Indeed, the Government and its business structure or lack thereof will have an immediate impact on BPIco. What else would you like to see the Government do to facilities the country’s growth?

I’ll revert back to the industrial areas. I think they could support this development near the ports more. Our ports are well greased and doing well, they’ve been around over a century. We just need to feed them. Essentially, through this we would like to send the signal to investors that when they come to our ports that they have a turnkey structure available.

 

Based on that description it seems the Vidin Port-Industrial Area discussed earlier is essentially a pilot program. Is that fair to say?

Although Vidin is at the idea and planning phase, you could say that, sure.

 

Please detail a concise message directed towards our readers in the US.

I’ve outlaid several challenges but really there are opportunities when foreigners enter the market. In the near future we are very ready and willing to work with incoming investors. Their interest can help our process of development. Not to be afraid, come here and be proactive. I try to operate supply-side economics. We are not Singapore that has a huge demand. So if a company comes to Bulgaria to take advantage of the financial incentives by producing goods, therefore, demand, we will be working together to develop and in return an investor will have an amicable place to produce. Bulgaria has great incentives, with security of EU membership and great access to the Middle East and Central Asia through our location on the Black Sea.

 

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