Controversy about the control of European Union (EU) funds erupted last week between Assen Gagauzov, minister of regional development and public works, and Petar Mutafchiev, minister of transport and communications. The conflict is about who will control the state Road Agency (RA), which governs the EU funds.

At present, Gagauzov governs the agency, but Mutafchiev has expressed several times his opinion that he should govern it. Mutafchiev motivated his demand with the fact that EU funds came through his ministry. Gagauzov and Vesselin Georgiev, head of the RA, claimed that the agency should remain under Gagauzov's control and a special board must be set up with the participation of Gagauzov, Mutafchiev and Plamen Oresharski, minister of finance.

Almost two billion euro is expected to come to Bulgaria from EU funds for the period 2007-13. The money will be used for repair works of all first-class roads and railway lines between Sofia and the Black Sea coast. The money will also be used for granting on concession the Trakia, Maritsa, Struma and Cherno More highways as well as all Bulgarian airports except the one in Sofia.

According to an action plan presented by Gagauzov, one billion euro is expected to come from the EU Cohesion Fund. The fund aims at helping countries reach EU standards. The money will be used for reparation works of nine roads and the ring roads of Montana, Vratsa and Gabrovo cities. With 1.5 billion euro for the fund, the Government expects to modernise the railway lines between Sofia-Pernik-Radomir; Sofia-Dragoman; Mezdra-Gorna Oriahovitsa and Parvomai-Svilengrad.

The construction of all highways will continue except for the Hemus highway, connecting Sofia with the Black Sea city of Varna. According to officials from the Ministry of Regional Development and Public Works, the last 118km of the Trakia highway will cost 250 million euro. The Trakia highway connects Sofia with the Black Sea city of Bourgas. Part of the Trakia construction includes the construction of Sofia's south ring road.

For the 96km of the Cherno More highway between Varna and Bourgas, the prognoses envisage 317 million euro. The most expensive highway will be the Struma highway between Sofia and Kulata, Bulgaria's main border checkpoint with Greece. The 160km are expected to cost close to 676 million euro.

Mutafchiev also presented his ideas for concessions on March 5 when his ministry published a strategy for development of Bulgarian ports. Thirty-two Bulgarian ports will be offered to investors within the framework of concession schemes.

The four largest Bulgarian ports in Varna, Bourgas, Rousse and Lom (the latter two on the Danube) will be split into smaller units according to a territorial principle. The smaller ports in Nessebar, Sozopol and Ahtopol (on the Black Sea) and Tutrakan and Silistra (on the Danube), will be offered on concession.

Seven new ports will be built according to the strategy. Five new ports, including a container, a grain terminal, a liquid cargo terminal, a hazardous cargo terminal and a passenger terminal will be located on shores of the Varna Lake and in the Varna Bay. The grain terminal would allow the transportation of large quantities of grain from Hungary through Rousse to Varna.

A new container terminal will be built in Bourgas. The seventh new port project will be on the Danube. All new projects will employ the BOT - build, operate, transfer - principle and will use state-owned land. A total of 25 million tones of cargo were processed at Bulgarian Black Sea ports in 2005. Bulk cargo accounts for 11 million tones. The volume of containers was estimated at 1.8 million tones, but this kind of cargo has witnessed a major growth of 28 percent compared to the preceding year. River ports have processed a total of 3.6 million tones of cargo. Per the strategy, the Romanian port of Constanca and the Greek port of Thessalonica are the major competitors to the Bulgarian ports sector.