Eurostat has pronounced that the concession contract for Bulgaria’s Trakiya motorway provides illegal state aid to the concessionaire.

As a result of this, The European Commission (EC) will officially give up funding the deal, experts say.

The three-month term the concessionaire had to secure project funding expired on July 26 2007, according to Pari daily.

There has been no announcement by the Regional Development and Public Works MInistry confirming that funding had been secured, and no European bank has agreed to grant a loan to the Bulgarian-Portuguese consortium that will build the motorway.

Pressed for options, the consortium has considered obtaining funding from outside of the EU.

Prime Minister Sergei Stanishev disregarded recent inquiries by MPs Evgeni Chachev and Kostadin Paskalev concerning the stalled construction.

The issue was addressed during Stanishev’s visit to Portugal a few months ago, and brought up again by Portuguese officials at a recent meeting with Bulgarian MPS.

The Portuguese officials were told that construction works would start in the beginning of November 2007 at the earliest.

However, a clause in the contract with the Bulgarian-Portuguese consortium stipulates that if Eurostat red-flags the project, the government would up with a new decision on the concession deal, according to Regional Development and Public Works minister Assen Gagaouzov.

This could delay and even stop construction, experts say.