Bulgaria, which is among the four countries bidding to host Austrian steelmaker Voestalpine's new five billion euro plant, has been told that the costs of meeting EU environmental rules will be key in deciding the plant's location.

This emerged from reports in Bulgarian media about a visit on April 23 to the plant by Bulgaria's Economy and Energy Minister Petar Dimitrov.

The other countries bidding to host the plant are Bulgaria's fellow EU member Romania, and non-EU members Turkey and Ukraine.

Dimitrov told reporters that investors in Voestalpine had said that they were satisfied with the business environment in Bulgaria, but if in terms of EU environmental protection measures they had to pay high costs for carbon dioxide emissions, they would build the plant outside the EU.

Bulgarian news agency BTA, quoting company management, said that Voestalpine accounted for 12 per cent of carbon dioxide emissions in Austria.

The plant will create 5000 jobs, and all its production will be for export. Dimitrov said that it was very important for Bulgaria to win the bid because it would help deal with the country's current account deficit problem.

He said that, if investors agreed to build the plant in Bulgaria, the plant could be declared a facility of national importance. A first-class investor can receive preferential treatment regarding infrastructure and personnel training. Other advantages which Bulgaria can offer in comparison to the other candidates for the project are the attractive tax system, qualified labour, and infrastructure, Dimitrov said.

He said that the current EU policy towards a drastic reduction of greenhouse emissions ran counter to the accelerated development of the countries of Central and Eastern Europe. Unless the policy is changed, the development of this part of Europe will be delayed by many years, and maybe even the standards of Central and Eastern Europe will be impossible to bring up to the levels in Western Europe, Dimitrov said.

The online English-language version of Bulgaria's Dnevnik daily said that the managers of the Austrian company were apparently pleasantly surprised that the Bulgarian government had taken to heart the fate of the project and had put together a working group to flesh out the various options for the construction of the plant in Bulgaria. This working group would discuss by June the proposal for a plant site of 1000 ha near the Bulgarian Black Sea coast.

On April 23, emerging from a meeting with Austrian economics and labour minister Martin Bartenstein, Dimitrov told reporters that he had pointed to the advantages Bulgaria has to offer to Voestalpine in terms of an investment environment, including a favourable tax environment and good infrastructure solutions, BTA reported.
Dimitrov said that Austria was Bulgaria's number one foreign investor and also the investor with the best environmentally-friendly investments.
    
After his meeting with Dimitrov, Bartenstein told reporters that there should an intergovernmental agreement on the project for construction of the Nabucco gas pipeline project. Austria has already submitted a proposal to the European co-ordinator of the project, and the European Commission has signaled its approval, he said.
    
Compared with the North and South Stream gas pipeline projects, Nabucco was at the most advanced stage and the only one prioritised by the European Commission, Barenstein said, adding, however, that both Austria and Bulgaria were interested in the South Stream project.

Dimitrov said that the two countries would play to a great extent the role of gas transmission carriers and gas centres.

Dimitrov also had talks with Austrian chancellor Alfred Gusenbauer. Gusenbauer said that Bulgaria stood a good chance of attracting the Voestalpine investment.

According to BTA, two-way trade between Bulgaria and Austria in 2007 hit a record, nearly 1.2 billion euro, up by 87 per cent on the 2006 figure. Austrian investments in Bulgaria in 1996-2007 added up to more than 3.6 billion euro, or 17 per cent of all foreign direct investment.