Page 91 - SE Outlook Regions 2023

At the same time, the government approved the implementation of a
derogation from the EU-wide ban on import or transfer of seaborne
crude oil and petroleum products from Russia. The derogation was
granted to Bulgaria by the EU in June under the sixth package of
sanctions adopted by the 27-member bloc in response to the war in
Ukraine. It will be valid until the end of 2024.

3.3.5 Construction

Bulgaria’s construction sector picked up after all restrictions related to
the coronavirus pandemic were lifted in 2021, but started to contract
again in April 2022 due to the Russian war in Ukraine and surging
energy prices. According to the GDP data, the construction sector
contracted by a real 16.4% y/y in Q2 2022.

The construction output decreased by 1.3% year on year in September,
after staying flat y/y in August, according to the latest available statistics
office data.

Even road construction was on a downward trend, after the former
government under Kiril Petkov decided to freeze payments to
construction companies until it checked all contracts signed by the
previous government led by Boyko Borissov.

Despite that, the composite business climate indicator in construction
increased by 2.2 points m/m in November with a favourable
assessment of the current situation and positive expectations for the
next few months.

In November the Supreme Administrative Court (SAC) annulled two
bans by former environment minister Borislav Sandov on the
construction of the Struma motorway in the Kresna Gorge. Construction
of the stretch has been objected to for years by environmentalists,
including Sandov, as it was threatening the area. However, Borissov’s
former government was determined to build the stretch and even gave
up EU funding in 2020, meaning it did not have to comply with EU
standards.

The Struma motorway is part of Pan-European Corridor IV and will
have a length of approximately 150 km. The motorway is on the route
Pernik – Dupnitsa – Blagoevgrad – Sandanski – Kulata, with a crossing
at the border with Greece. Sections completed so far include Dolna
Dikanya-Dupnitsa (16.8 km), Dupnitsa-Blagoevgrad (37.5 km) and
Sandanski-Kulata (14.7 km).

The construction sector could pick up in 2023 if a regular government is
appointed and the road construction projects are restarted. Expected
completion of the pan-European Corridor VIII in 2022 did not happen
but could be carried out in 2023. In October 2021, Bulgaria, Albania
and North Macedonia signed a memorandum of cooperation on the
construction of sustainable infrastructure along the pan-European
Corridor VIII.

91 SE Outlook 2023 www.intellinews.com