CULTURE Minister Stefan Danailov made a clear statement on December 6 that the Cabinet would like to suspend the privatisation deal for Boyana Film studios.

Danailov said he was ready to accept a decision by the Privatisation Agency (PA) that would render void the contract signed with US company Nu Image on the sale of 95 per cent in the studios. He was speaking to journalists after a meeting with former prime minister and leader of the National Movement Simeon II (NMSII), Simeon Saxe-Coburg.

The statement by Danailov came in response to a letter sent to him by PA executive director Todor Nikolov.

Nikolov had informed the Culture Ministry about  the privatisation procedure and the possible outcome of the current deadlock.

The deal with Nu Image was signed  in June after the company won a tender for the privatisation of Boyana Film.

However, the state has not yet enacted the agreement and Nu Image has been awaiting the authorities’ decision before deciding its own action on the case.

Nu Image placed the highest bid - 12.2 million leva - for 95 per cent in Boyana Film in the tender held in February. It pledged to invest a further 30.5 million leva to upgrade the studio’s facilities.

The privatisation procedure for Boyana Film has been constantly criticised for lack of transparency and for allegations against the former government of the NMSII of favouring Nu Image. The US company has been present in Bulgaria for some years, shooting scores of mostly low-profile productions.

Bavaria Film - an unsuccessful candidate for the studios - claimed that Nu Image had been selected as winner in the tender only on the basis of its financial offer, while Bavaria Film had also offered to back the development of the movie-making industry in Bulgaria as a strategic commitment, one of the requirements for the candidates.

The German company challenged the PA’s decision, citing conflicts of interest and non-observance of Boyana Film’s privatisation strategy.

The bone of contention is not only the filmmaking facility in the outskirts of Sofia, but also its very attractive land, which reportedly is worth at least 350 million euro. The deal is further obstructed by restitution claims of landowners in the area, which say that 85 per cent of the land on which the studios stand is theirs.

Danailov surprisingly said on December 6 that he had required the PA to negotiate a change to the deal, which will block any operations with the studios’ land for 20 years, instead of 10 years, as was stated in the original clause in the contract with Nu Image.

“Nu Image has not reacted to this new proposal, which means that they do not want to negotiate it,” Danailov said. This has made him believe that the deal should be suspended.

Meanwhile, Ivan Todorov, a lawyer for Nu Image, said, quoted by the newspaper Dnevnik, that the US company was ready to accept the 20-year term blocking any disposition with the land of Boyana Film.

The legal advisers of Nu Image, however, say that the term will be void, as long as the law allows for a maximum of 10 years in a case of such a limitation. They believe that the new requirement shows a will to terminate the deal instead of completing it. The lawyers say that Nu Image will attack in court any decision to terminate the deal.

Meanwhile, Danailov also said on December 6 that a new privatisation procedure for Boyana Film was one of several options for moving forward. Another possible outcome is to grant a concession for operating the film studios.

On November 18, the UK’S Ealing Studios, another unsuccessful bidder for the privatisation of Boyana Film, offered to be granted a concession for the studios.

Patrick Newman, Ealing representative, said that they submitted their proposal in an open letter to Prime Minister Sergei Stanishev. Ealing said they were ready to discuss with Bulgarian filmmakers a strategy for the future development of Boyana Film.

However, even this outcome might prove hardly possible.

Article 4 of the Act on Concessions does not mention any film studios or related property that could be granted by such a contract.

It stipulates, however, that other sites, in addition to the mineral resources, waters, coastlines, railway infrastructure, airports and others, could become subject to concession agreement under other laws.