Minister Bogdanov: Restructuring of SCC companies will go through a thorough analysis and in an open dialogue

Minister Bogdanov: Restructuring of SCC companies will go through a thorough analysis and in an open dialogue

The abuses in the SCC must not continue, he insisted

The restructuring of the companies under the umbrella of the State Consolidation Company (SCC) will undergo a thorough analysis and will be widely discussed. A comprehensive transformation programme will be developed and proposed to the Council of Ministers for a vote. It will be presented and discussed with experts, representatives of various parliamentary groups and within the Economic Committee of the National Assembly. This was said by the Minister of Economy and Industry Bogdan Bogdanov in response to a parliamentary question on the future development of the SCC. He said the process would take time to minimise any risks to the work of the state companies and their 5 500 employees.

‘To date, the idea of establishing the SCC as a holding structure is visibly flawed,’ Bogdanov was adamant. The minister pointed to a number of abuses and violations in the management of the company in the past years, which generated millions of leva in losses. Among them are the over BGN 500 million spent on dam repairs with no results, the unrealized government complex and the series of contracts concluded for the transfer of receivables by the SCC. He is adamant that these abuses must not continue.

Bogdanov pointed out that the company was in systematic non-compliance with the Public Enterprises Act and recalled that when he took office, the financial statements of the SCC for 2021 and 2022 were missing, which was in non-compliance with the law. According to the minister, all violations are obvious and have been given to the competent authorities, stressing that the SCC is a permanent subject of investigation by the prosecution.

Minister Bogdanov recalled that this week the loan of BGN 126.4 million to the Bulgarian Development Bank was repaid. ‘After we managed to return to the state the first BGN 45 million from the unrealized government complex, on Wednesday we officially repaid the entire debt,’ Bogdanov said. The loan obligation was accrued between 2018 and 2020 and a significant portion of the state-owned enterprises to the SCC were pledged as collateral thereon. Among them are LB Bulgaricum EAD, Kintex EAD, Niti EAD and others, and now all foreclosures and liens on them are to be removed. In Bogdanov’s words, the interest on the loan amounted to more than BGN 6 and a half million last year alone. He pointed out that with the repayment of the loan, the companies will be able to grow and pay dividend to the budget instead of continuing to pay interest on the loan.

According to him, the Ministry of Economy and Industry, as the principal of the SCC, will take action only in cases of inefficient management. ‘Changes will not be made in companies that are working well — like VMZ,’ Bogdanov said. According to him, the future development of state-owned enterprises from now on will be focused on promising industries such as clean technologies, circular economy and others.

He also commented on the possibility of significantly reducing the number of board members in state-owned enterprises by restructuring them. ‘At the moment, their composition ranges from about 70 people, and they will be able to be reduced to 20 people. The important thing is to pass this process in an open dialogue and to guarantee the jobs of the companies’ employees’, Bogdanov stressed.