BCC with concerns about the planned abandonment of state property in industrial parks

"Removing the possibility of state ownership in industrial parks will lead to inequality and a violation of competition between already existing parks and newly created ones." This is stated in an opinion of the Bulgarian Chamber of Commerce (BCC), published on Friday, February 9. The opinion is on the occasion of the draft Law on Amendments and Supplements to the Law on Industrial Parks, proposed for public consultation on January 11 this year, with a deadline for submission of proposals until February 9.

The authors of the amendments and additions to the Law on Industrial Parks claim that they aim to provide for the possibility of financial assistance to the owners and operators of industrial parks for the construction of the internal technical infrastructure of the park. According to them, a new type of specialized park is being created, in which a type of production activities are carried out, which will stimulate clustering. At the same time, they admit that only of the main changes is related to the proposal to drop the possibility for the state to be the direct owner of an industrial park by creating a "state industrial park".

On this occasion, the BSK commented that in the reasons for the draft law and the preliminary partial impact assessment there is no information and analysis about the activity and structure of the active industrial parks in Bulgaria, which would allow a reasoned assessment of the need for the proposed changes to be made. No report and analysis of the implementation of the "Strategy for the Development of Industrial Zones" adopted in 2015 has been made, and the newly developed strategy is not yet available for public discussion, experts from the chamber say.

The size of a minimum of 150 decares for an industrial park specialized in one type of production is not justified, since economic activities, as classified by NACE (KID), require different conditions for the implementation of the activity - area, energy, raw materials, infrastructure, workforce and others.

By eliminating the possibility of participation of the state or state-owned companies in the creation and management of industrial parks, an essential tool for management and implementation of a purposeful national policy is taken away. The proposed changes limit the participation of enterprises in which the state does not have a decisive role in decision-making, i.e. has a minority share, but they are generally excluded from the possibility of participating in such an initiative.

BCC draws attention to the fact that under the "National plan for recovery and sustainability" at the end of last year, 23 proposals from industrial parks in the country were submitted under the "Program for public support for the development of industrial areas, parks and similar territories and for attracting investments ("AttractInvestBG")". Eligible candidates were those registered under the Law on Industrial Parks, IP, including "state-owned, when the owner is the state". The budget of the grant under the procedure was set at BGN 212.5 million, as the sum of project proposals exceeds twice the secured grants.

 Industrial parks (IP) are a frequently used tool of regional policy to increase economic viability and social equality. Their successful operation can increase the efficiency of land use and, by attracting investment, create high added value throughout the country. However, the creation of an IP requires significant initial investments in the construction of their infrastructure and the preparation of plots, which is often realized through public financial instruments, the chamber recalls.

In this context, attention is paid to their important role in achieving sustainable development by promoting economic growth while minimizing adverse impacts on the environment and society. The industrial park serves as a strategically developed tool by the government to implement industrial policies, with the main objective of attracting investment and promoting overall economic growth and development [ reads the statement ].

The BCC proposes to envisage the possibility of financial support for the construction of the internal technical infrastructure of the park both for the owners of a key industrial park and for the operators. According to the Law on Industrial Parks, an operator of an industrial park is a person who carries out the activities of operating the industrial park and performs the functions that the owner himself has. For this reason, according to BCC, it is "illogical and even discriminatory that the possibility to use the provided priority is applicable to a key industrial park only in cases where this park is operated directly by the owner, but not in cases where the activities in the same key industrial park are carried out through an operator". The question raised also has practical significance in cases where the application for support of a key industrial park is made not by the owner, but by the operator of the same park, added the Chamber. In §11 of the Project, amendments are foreseen in art. 20 of the ZIP, by creating a new paragraph 3, regulating priority under equal conditions when applying for support under paragraph 2 for the owners of a key industrial park and an investor in a key industrial park. BSK proposes that the priority provided should apply to operators of a key industrial park, as in the proposed project under §11, in the new paragraph 2 of Article 20, after the word owner, "and operator" should be added.

"In the reasons accompanying the proposed Amendment Bill (Amendment Bill) to the Law on Industrial Parks, it is postulated that the purpose of the Law on Industrial Parks is "to provide for the possibility of financial assistance to the owners and operators of industrial parks for the construction of the internal technical infrastructure of the park".

According to the ZIP, an operator of an industrial park is a person who carries out the activities of operating the industrial park and performs the functions that the owner himself has. Therefore, it is illogical and even discriminatory that the possibility to enjoy the priority provided for is applicable to a key industrial park only in cases where this park is operated directly by the owner, but not in cases where the activities in the same key industrial park are carried out through an operator .

The question raised also has practical significance in cases where the application for support of a key industrial park is made not by the owner, but by the operator of the same park," the Bulgarian Chamber of Commerce stated.

Until now, opinions on the proposed amendments have been proposed by the National Company of Industrial Zones, which offers a simpler model with regard to the financial part, as well as by the Dobroslavtsi Economic Zone.

"The management of "Economic Zone Dobroslavtsi" EAD expresses an opinion regarding the amendments to § 11, art. 20, new paragraph 4, proposing to add that the financial support will only apply to key industrial parks and those from them, in which the amount of the investment is above the minimum amount for a priority investment project in one site for the construction and development of an industrial park," the short text says.