The Recovery Plan – another delay and new changes

Just when we thought that the National Recovery and Resilience Plan (NRRP), through which Bulgaria will receive 13 billion leva from the Mechanism for Recovery and Resilience (MRR), is finally ready, changes were made once again. The final (fifth) version was submitted to the European Commission (EC) in October 2021 (IME analysis), what followed was a leak of some of the EC’s notes, a few public council meetings, organized by the Minister of Finance, reworking of the plan and another delay for EC assessment – until the 15^th of April.

Concurrently, the reworking of the projects is incredibly vague. The announced projects include not just reworking of old ones but entirely new as well. There is one more group, comprised of new projects, but with the numbering of old ones which leaves it unclear if the old ones are being dropped. There is a lack of clarity whether the new final report will be published in its entirety, so that it can be observed at the expense of what will these new projects be realized.

Updated projects for NRRP, the 11^th of March 2022

The new projects which appear in the latest actualization are:

– New project “National infrastructure for retaining electrical energy from Hydroelectric Plants” valued at over 1.5 billion leva, mainly for the purchase, installing and beginning the exploitation of national infrastructure of facilities for the storage of electrical energy with combined capacity of 6000 MWh. All requested funds will be provided from MRR while the investment will be executed by a newly-registered Ministry of Energy’s project company, which will partake in the operating of the facilities for energy storage.

–  New project “Digital transformation of Bulgarian Post and provision of complex services.” The project combined is over 100 million leva and includes some basic activities: 1) Renovating postal stations (25 million leva); 2) digital services (68 million leva); 3) Introducing tele-medical services for the population in over 450 remote areas (7 million leva); 4) Installation of recharge stations for electric automobiles (2 million leva).

– New project “Construction, development and optimization of the digital TETPA system and radio-relaying network, managed by the Ministry of Internal Affairs.” The project will cost approximately 150 million leva and mainly includes the increasing of the portion of radio coverage of TETPA from 75% to 95% of the country’s territory.

–  Project “Carrying out a reform in the service of passengers with rail transport in the near-city and in-between regional routes, via the purchase of a new movable composition.” The project is valued at nearly 1.5 billion leva and envisages the purchase of: 1) 42 train cars for the transportation of passengers from and to the inhabited areas around Sofia (Elin Pelin, Dragoman, Lakatnik, Bankya, Pernik, Radomir) and Plovdiv (Karlovo, Pazardzhik, Dimitrovgrad, Belozem, Assenovgrad); 2) fast trains, which can service the traveling between all larger cities in the country (mainly between Sofia, Plovdiv, Burgas, Varna, Russe, and Stara Zagora); 3) 16 electric battery maneuvering locomotives.

– Project “Introducing the European system for train control (ERTMS) to the board equipment of motorway, zero-emission electric locomotives and zero-emission electric trains, which operate on the conventional railway network of the Republic of Bulgaria”, which is presented with the numbering of project “Recovery of key for the climate ecosystems in execution of the Strategy of biological diversity of the EU and the aims of the European Green Deal” valued at 72 million leva. There is a chance that the latter will be dropped from the final version of the NRRP.

–  Project “Digitization on the far-reaching TEN-T network through an introduction of ERTMS level 3 in the railway segment Russe – Kaspichan”, which is presented with the numbering of project “Construction of National complex center and network for monitoring, control and management” valued at 199 million leva. There is a chance that the latter will be dropped from the final version of the NRRP.

–  Project “Construction of intermodal terminal in the central north region of planning in Bulgaria – Russe”, which is presented with the numbering of project “Modernization of the material base and introducing of information technologies for the improvement of the social support for the population from the Agency of social support” valued at 10 million leva. There is a chance that the latter will be dropped from the final version of the NRRP.

It is unclear the extent to which we can be certain that the new actualization will be the last and that soon we will witness the full and final version of the NRRP. Even more concerning is that the postponement and a series of changes leads to a delay in the work on the projects. There is a weakening in the pressure and stimulus for active work on numerous reforms, which (in large part) are aimed at improving the quality of management, efficiency of public expenses and the increase of the economy’s competitiveness.

*This document is funded by Active Citizens Fund Bulgaria through the Financial Mechanism of the European Economic Area and Norwegian Financial Mechanism. All its contents are the sole responsibility of Institute for Market Economics and do not represent in any way the views of the Financial Mechanism of the European Economic Area and Norwegian Financial Mechanism and Active Citizens Fund Bulgaria. (www.activecitizensfund.bg)