Privatisation
The process of privatisation in Bulgaria has made significant progress in recent years, after many fits and starts, and privatisation in remaining sectors, while not completed, appears well on track.

Big Deals
Flawing this picture, however, is the prolonged saga of failed attempts to sell Bulgartabac, the state tobacco giant that occupies an overwhelmingly large share of the market.

Major successes in privatisation in recent years include the 2003 sale of DSK (the State Savings Bank), and the 2004 sale of the Bulgarian Telecommunications Company (BTC), the latter achieved only after a complicated series of court challenges. The BTC deal was the biggest in Bulgarian privatisation history with a total financial result of 1.1 billion euro, then Privatisation Agency executive director Ilia Vassilev said at the signing of the sale contract in February 2004. More recently, seven electricity distribution utilities were sold, as was the case of DSK and BTC, to foreign investors.

Statistics
According to the most recent Privatisation Agency statistics, about 87 per cent of the assets slated for privatisation are in private hands. PA records show that the largest number of privatised enterprises were from the construction sector (33 per cent), the energy sector (17.5 per cent), trade (15.4 per cent), agriculture (13.3 per cent) and industry (11.2 per cent).

In 2004, proceeds from privatisation added up to 2.2 billion leva. The PA noted, for the sake of comparison, that agreed payments for the entire 1999 to 2003 period were two billion leva. According to the PA’s report to Parliament, the agency signed 1376 privatisation deals in 2004, five times more than the planned 264 sales.

2005 Forecast
Current PA executive director Atanas Bangachev, in his report to Parliament finalised in February, said that the agency expected privatisation revenue of 450 million leva for 2005. This sum is expected to come from the sales of the hydroelectric power plants in Bobov Dol, Rousse and Varna, Bobov Dol mines, sea and river shipping companies, and Boyana Film Studios. He did not include Bulgartabac in his estimates.

The Bulgartabac Saga
The Government has pledged itself to complete privatisation in the industrial sector and among utilities by the end of 2006, but still the question of Bulgartabac, which frequently has been at the core of national political controversy, remains.

Bulgartabac includes a total of 12 processing factories and nine cigarette factories, and has five cigarette factories in Russia and one each in Ukraine, Romania and the former Yugoslavia.

There has been a long succession of failed strategies, procedures, and attempts to sell Bulgartabac. The most recent debacle, in February 2005, came close to causing the fall of the Government. When this crisis was over, Bulgaria emerged with a new Economy Minister, a new Agriculture Minister, and a public debate on a proposal by Finance Minister Milen Velchev that the sale of Bulgartabac be left to the Government due to be elected in parliamentary elections scheduled for June 2005.

However, Agriculture Minister Nihat Kabil, in one of his first statements after taking office in February, said that he believed that the current Government should attempt to sell Bulgartabac before the June elections.